la«*  dqte  stamped  below 


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515usmrsfif  Series; 


OCEAN   AND    INLAND    WATER 
TRANSPORTATION 


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-y^ 


OCEAN 

AND  INLAND  WATER 

TRANSPORTATION 


BY 

EMORY   R.  JOHNSON,   Ph.D. 

PROFESSOR    OF  TRANSPORTATION    AND   COMMERCE 

IN   THE    UNIVERSITY   OF   PENNSYLVANIA 

MEMBER    OF  THE    ISTHMIAN    CANAL   COMMISSION,    1899   TO    I904 

PRESIDENT    OF    THE    GEOGRAPHICAL    SOCIETY    OF    PHILADELPHIA 

AUTHOR   OF   "AMERICAN    RAILWAY   TRANSPORTATION" 

2.1  3     G    C> 


NEW    YOKK    AND    I.oNDON 

D.   APPLETOX    AND    COMPANY 

IQI  I 


Copyright,  1906,  bt 
D.  APPLETON  AND  COMPANY 


Published  June,  1906 


Printed  in  the  United  States  of  America 

47^7 


TO 

M  Y     W  I  F  E 

IN    APPRECIATION    OF   HER 
HELPFUL   CRITICISM 


PREFACE 


The  discussion  of  transportation  by  water  naturally 
divides  itself  into  two  parts,  transportation  upon  the 
ocean  and  upon  inland  waterways.  Ocean  transportation 
exceeds  the  traffic  of  inland  waterways  in  volume  and  im- 
portance, and^  for  economic  and  political  reasons,  merits 
more  detailed  consideration.  Accordingly,  about  four- 
fifths  of  this  volume  is  taken  up  with  Book  I,  devoted  to 
ocean  transportation.  Inland  waterways  and  their  traffic 
are  dealt  with  in  Book  II.  The  volume,  as  a  whole,  is  a 
treatise  on  the  economics  of  transportation  by  water  and 
is  intended  to  be  a  complement  to  the  author's  work  on 
"  American  Railway  Transportation,''  the  first  edition  of 
which  appeared  in  1003. 

The  author  is  under  special  obligations  to  his  colleague. 
Dr.  J.  Russell  Smith,  of  the  University  of  Pennsylvania, 
whose  valuable  monograph  on  "  The  Organization  of 
Ocean  Commerce "  and  whose  un]iublished  notes  have 
been  of  assistance  in  writing  several  chajitors.  The  author 
is  also  indebted  to  Mr.  Frank  L.  Xoall,  of  the  firm  of  Peter 
Wright  and  Sons,  Philadoliihia.  for  ]ireparing  the  tables 
of  ]i(irt  cliargos  and  furuisliiug  the  freight  shi]ipiug  ]ia]iers 
that  are  reproduced.     Much  of  the  iuforuiatiou  coutained 


VI  li  PREFACE 

in  the  volume  has  been  secured  by  correspondence  with 
government  officials  and  business  men^  but  aid  has  been 
given  by  so  many  jTcrsons  that  the  author  must  content 
himself  with  a  general  acknowledgment  of  the  value  of 
their  cooperation. 

Acknowledgment  is  hereby  made  of  the  assistance 
received  from  the  Carnegie  Institution  of  Washington  in 
the  collection  and  preparation  of  materials  for  this  volume. 

E.  E.  J. 


CONTENTS 


BOOK  ONE.— OCEAN   TRANSPORTATION 

PAGES 

■><^  Introduction 3-6 

Definition  of  ocean  transportation,  3. — The  divisions  of 
the  subject,  3. — Economics  of  ocean  transportation  has 
been  Uttle  studied,  4. — The  United  .States  to  become  a 
great  maritime  nation,  3. — The  Merchant  Marine  cjuestion 
stated,  6. 

PART  I.— THE  OCEAN  TRANSPORTATION  SYSTEM 
CHAPTER   I 

The  Measurement  of  Vessels  and  Traffic         .       .         9-12 

Usage  of  the  words  ton  and  tonnage,  9. — Vessel  tonnage — 
displacement,  gross  and  net  register — defined,  9. — Cargo 
tonnage — long,  short,  metric,  and  measurement — defined, 
11. — Ratio  of  net  register  to  gross  register  and  cargo  ton- 
nage, 11. — Definition  of  registered,  enrolled  and  licensed 
shipping,  12. 

V    CHAPTER    II 

The   History   of   the   Ocean   Carrier— The   Sailing 

Vessel 13-25 

Sifce  and  type  of  ship  inlluciiccd  by  service  required,  13. — 
Square  and  fore-and-aft  rigs  defined,  14. — Description  of 
full-rigged  ship,  bark,  barkentine,  brig,  brigantine,  schooner 
and  sloop,  lugger  and  ketch,  15. — History  of  the  schooner, 
17. — Technical  development  of  the  sailing  vessel  during  the 
nineteenth  century,  18. — The  clipper  .tihip,  20. — Decline  in 
.sail  tonnage,  22. — Explanation  of  the  sul)stitution  of  steam 
for  sails,  23. — Future  of  the  sailing  vessel,  25. — References 
for  further  reading,  25. 

ix 


X  CONTENTS 

CHAPTER   III 

PAGES 

The  History  of  the  Ocean  Carrier — The  Steamship     26-43 

The  early  steamships:  Clermont,  Snrrnuwh,  Royal  William, 
etc.,  26. — ^Their  size,  speed  and  engine  pmver,  27. — Sul)- 
stitution  of  screw  propeller  for  paddle  wheels,  2S. — Intro- 
duction of  twin  screws,  29. — Description  of  the  types  of 
marine  engines  successively  employed,  31. — The  evolution 
of  the  marine  boiler,  35. — Effective  power  of  marine  engines 
1840-1898,  37. — The  turbine  engine  described,  38. — The 
technical  development  of  the  huU,  40. — Change  from 
wooden  to  iron  and  steel  hulls,  41. — Size,  speed,  and  engine 
power  of  the  Minnesota,  Dakota  and  the  latest  Cunarders, 
42. — References  for  further  reading,  43. 

X   CHAPTER   IV 
Ways  and  Terminals  of  Ocean  Transportation        ,       44-63 

Factors  determining  the  location  of  ocean  routes,  44. — The 
North  Atlantic  route,  46. — The  route  via  the  Suez  Canal, 
46. — Route  around  Africa,  47. — Route  around  South 
America,  47. — Routes  to  and  in  the  Gulf,  and  Caribbean, 
_>,  48. — North  Pacific  route,  49. — North  America-Australia 
route,  49. — Chart  of  ocean  routes,  50. — Distances  via 
Panama  and  existing  routes,  51. — ^The  hi.story,  cost  and 
traffic  of  the  Suez  Canal,  52.- — Corinth  Canal,  53. — Baltic 
Canal,  54. — Amsterdam  and  Manchester  canals,  55. — Four 
types  of  ports  described,  56. — Ports  classified  according 
to  administrative  authority,  58. — Port  administration  in 
Europe,  58. — In  the  United  States,  59. — Technical  improve- 
ments of  terminal  facilities,  61. — References  for  further 
reading,  62. 

PART  XL— THE  OCEAN  TRANSPORTATION   SERVICE 

CHAPTER   V 
The  Ocean  Freight  Service 65-86 

Relation  of  the  freight,  passenger,  express,  and  mail  services 
to  each  other,  67. — Value  and  volume  and  nature  of  the 


CONTENTS  xi 


PAGES 


foreign  trade  of  the  United  States,  68. — Line  and  charter 
traffic,  70. — Freight  forwarding  and  ship  brokerage,  71. — 
Freight  shipping  papers  described,  73. — Explanation  of 
shipping  papers  by  Peter  ^^'right  &  Sons,  77. — Description 
of  terminal  facilities  for  handling  ocean  freight,  S3. — Refer- 
ences for  further  reading,  SO. 

CHAPTER    VI 

The  Passenger  Service 87-98 

Influence  of  passenger  traffic  on  speed,  87. — Statistics  of 
cabin  and  steerage  passengers,  88. — Rapid  growth  of 
steerage  traffic,  90. — Tourist  agencies,  90. — Inspection  of 
immigrants  at  Ellis  Island,  New  York,  91. ^Tendencies 
noticeable  in  the  passenger  service,  92. — Separate  accom- 
modations for  steerage  passengers  not  emigrants,  9(5. — 
Steerage  acconnnodations  on  the  Caronia  and  Carmania, 
97. — References  for  further  reading,  98. 

CHAPTER    VII 

The  Ocean  ^Iail  Service 99-lOG 

Volume  of  ocean  mail,  99. — Cost  of  transporting  ocean  and 
foreign  mails,  99. — The  contracts  with  steamship  companies 
for  carrying  the  mails,  100. — Payments  for  the  non-contract 
service  of  carrying  the  mails,  102. — Payments  for  other  than 
the  contract  and  non-contract  services,  102. — Sea  post 
offices,  103. — The  international  parcels  post,  103.— The 
Universal  Postal  Union,  104. — References  for  further  read- 
ing, lOG. 

CH.\PTER  VIII 
The  Intern.\tional  Express  Service  ....  107-122 
E.xpress  traffic  described,  107. — History  of  the  development 
of  an  international  .service  by  American  companies,  107. — 
The  traffic  arrangement  of  the  American  Express  Company 
with  the  British  post  office,  108. — Blank  form  of  express  re- 
ceipt, 107-108. — Bu.siness  organization  of  the  international 
express  service,  109. — Express  shipping  |)apers  defined,  109. 
— Business  arrangements  between  express  and  steamship 


xii  CONTENTS 

PAGES 

companies,  110. — Competition  of  the  express  and  interna- 
tional parcels  post,  111.  —  Reference  for  further  reading, 
113. — Reproduction  of  an  express  company's  bill  of  lading, 
115. — Express  company's  way  bill,  121. — Invoice  or  mani- 
fest of  goods  exported  by  express,  122. 


PART   III.— THE   OCEAN   CARRIERS   AND  THE   PUBLIC: 

THE    RELATIONS    OF    THE    CARRIEPuS    WITH    ONE 

ANOTHER  AND  THE   PUBLIC 

CHAPTER    IX 

Organization  of  Ocean  Transportation  .  .  .  12.5-133 
General  characteristics  of  the  service,  125. — The  evolution 
of  the  organization  of  ocean  transportation,  127. — The  mer- 
chant traders  of  the  eighteenth  century,  128. — The  early 
packet  lines,  129. — Early  steamship  lines  and  their  effect 
on  commerce,  129. — The  growth  of  the  great  lines  of 
steamers  of  the  present  day,  131.— The  International  Mer- 
cantile Marine  Company,  132.— References  for  further  read- 
ing, 133.^^ 

CHAPTER   X 

Monopoly  and  Competition  in  the  Oce.\n  Tr.\nspor- 

T.\TioN  Service 134-141 

Monopoly  defined,  134. — Reasons  why  competition  is 
stronger  among  ocean  carriers  than  among  railroads,  135. — 
Competition  for  charter  traffic  cannot  be  restricted,  138. — - 
Intensity  of  competition  among  ocean  lines  becomes  disas- 
trous unless  restrained  by  agreements,  139. — Such  restraint 
a  benefit  to  the  public,  140. — References  for  further  reading, 
141. 

CHAPTER    XI 

R.\te  AND  TR.\rFic  Agreement.s,  Pools,  and  Con.soli- 

DATioN  OF  Ocean  Carriers 142-158 

Cooperation  among  ocean  carriers  necessary,  142,  and  may 
be  advantageous  to  shippers,  143. — The  "Conferences"  de- 
scribed, 144.— The  different  forms  of  organization  charac- 


CONTENTS  xiii 

PAGES 

terizing  the  Conferences,  145. — Main  provisions  of  the  Con- 
ference agreements,  147. — Classification  of  ocean  freight, 
148. — Agreement  as  to  freight  rebate,  151. — Ocean  traffic 
pools  and  money  pools,  152. — Difficulties  of  making  and 
enforcing  conference  agreements,  155. — Agreements  more 
stable  in  Europe  than  in  the  United  States,  157. — References 
for  further  reading,  158. 

CHAPTER   XII 

CoOPER.\TION    AND    CoMBINATIO.V     OF    OcEAN     AND     RaII. 

Cahkiers    159-168 

Rail  and  ocean  carriers  need  to  co()perate,  1.59. — FaciUties 
for  shipping  by  rail  and  water  on  through  bills  of  lading, 
leO.r—Combination  of  railroad  and  steamship  companies  in 

^the  transpacific  trade  of  the  United  States,  161. — Pacific 
coastwise  lines  controlled  by  American  companies,  163. — 
Relations  of  American  railroads  to  the  Gulf  and  Atlantic 
steamship  lines,  164. — The  railroads  and  the  Atlantic  coast- 
wise traffic,  166. — Policy  of  the  British  railroads,  167. — 
Combination  of  ocean  and  rail  carriers  not  a  menace  to  the 
public,  168. — References  for  further  reading,  168. 

CHAPTER    XIII 

Ocean  Fare.s  and  Rates 169-188 

Payments  for  carrying  foreign  mails,  169. — Passenger  fares, 
170. — Competitive  character  of  freight  rates,  172. — ^Trip 
charter  and  time  charter  rates,  173. — Description  of  the 
services  of  the  .ship  broker,  174. — Blank  form  of  a  "charter 
party,"  175. — Rates  on  less  than  ves.sel  cargo  shipments, 
179.— Rates  fixed  by  time  contracts,  181.— Berth  cargo. 
181.— Rates  on  import  and  export  traffic,  183.— Fluctviations 
and  decline  in  ocean  rates  1884  to  1903,  shown  l)y  tables 
and  charts,  184.— Improvements  in  service  have  lowered 
rates,  188. — ^References  for  further  reading,  188. 

CHAPTER    XIV 

>r.\RiNE  Insurance         .       . 189-206 

Marino  insurance  es.scntial  to  connncrce,  189. — Early  his- 
tory, 190.— History  of  Lloyd's  Association,  190.— Descrip- 


XIV  CONTENTS 


tion  of  Lloyd's,  191. — Lloyd's  publications,  192. — History 
of  marine  insurance  in  the  United  States,  193. — Causes 
accounting  for  the  decline  of  marine  insurance  in  the  L'nited 
States,  195. — Ri.sks  underwritten  in  the  United  States  by 
American  and  foreign  companies,  196. — American  com- 
panies combine  fire  and  marine  underwriting,  ]9fi. — Self- 
insurance,  197. — The  marine  insurance  policy  defined,  198. 
— Its  essential  features,  199. — Kinds  of  property  covered, 
199. — The  different  kinds  of  policies,  199. — The  various 
kinds  of  losses  covered  by  marine  policies,  201. — The  lia- 
bilities assumed  by  marine  underwriters,  202. — Particular 
and  general  average,  203. — References  for  further  reading, 
204. — Lloyd's  form  of  policy,  205. — Sample  form  of  vessel 
policy,  opposite  p.  202. 


PART    IV.— GOVERNMENT    AID    AND    REGULATION    OF 
OCEAN  COMMERCE  AND  TRANSPORTATION 

CHAPTER    XV 

Aid  and  Regulation  by  the  National  Government   .   209-233 

Maritime  success  and  national  greatness,  209. — Purposes  of 
government  aid  to  ocean  transportation  and  commerce, 
210. — Four  kinds  of  aid  given  by  the  United  States  Govern- 
ment, 211. — Federal  departments  and  bureaus  concerned 
with  ship  building  and  commerce,  213. — The  Corps  of  Engi- 
neers, 214. — Department  of  Commerce  and  Labor,  214. — 
Lighthouse  Board,  215. — Coast  and  Geodetic  Survey,  215. — 
Bureau  of  Fisheries,  216. — Fur  Seal  and  Salmon  Fisheries 
of  Ala.ska,  217. — Steamboat  Inspection  Ser\-ice.  218. — 
Bureau  of  Navigation,  218. — Bureau  of  Immigration.  220. — 
Bureau  of  Manufactures  and  its  Consular  Division,  221. — 
Bureau  of  Standards,  223;  of  Statistics.  223;  of  the  Census, 
224. — The  Customs  Sers-ice.  225. — Revenue  Cutter  Sersice, 
225. — Life  Saving  Service.  226. — Public  Health  and  Marine 
Hospital  Ser\-ice.  227. — Weather  Bureau,  228. — Hydro- 
graphic  Office.  230. — Foreign  Mail  Service.  231. — Consular 
Service  and  Bureau  of  Trade  Relations.  221.  223.  231. — 
Department  of  Justice,  232. — References  for  further  read- 
ing, 233. 


CONTENTS  XV 


CHAPTER    XVI 

Aid  and   Regulation'   by  the   State   and   Municipal 

Governments 234-245 

State  and  Federal  powers  over  commerce,  234. — Leading 
decisions  of  the  Supreme  Court  defining  those  powers,  234. — 
National  appropriation.s  for  rivers  and  harbors,  236. — Con- 
trol of  pilots  and  pilotage,  237. — Pilotage  regulations  at 
Philadelphia  and  New  York,  238. — Health  and  quarantine 
regulations,  239. — Control  of  piers,  docks,  and  other  terminal 
facilities,  242. — PoUce  supervision  of  ports,  244. — References 
for  further  reading,  245. 

CHAPTER   XVII 

Port  and  Terminal  Charges  and  the  Tax.\tion  of 

Shipping 246-256 

Expen.ses  incurred  in  entering  and  discharging  at  New 
York,  Antwerp,  Rotterdam,  Hamburg,  Havre,  Liverpool, 
247. — Tables  showing  entrance,  clearance  and  port  charges 
for  a  typical  sailing  vessel  at  New  York,  248. — For  sailing 
vessels  and  steamers  at  Philadelphia,  249. — Tonnage  taxes, 
252. — State  taxes  on  ships  as  property,  253. — Abolition  of 
State  taxes  desirable,  255. — References  for  further  reading, 
256. 

CHAPTER    XVIII 

The     Mercantile    Marine    Policy    of    tiik     United 

States        257-265 

The  four  ways  in  which  the  L^nited  States  has  aided  ship- 
building, 257. — Policy  of  the  United  States  toward  the 
ownership  and  operation  of  ships,  260. — Legislation  regard- 
ing seamen,  263.— Mercantile  marine  policy  of  the  United 
States  has  been  liberal  but  unsuccessful,  264. — References 
for  further  reading,  265. 

CHAPTER    XIX 

Condition  of   the  American    Shipbuildinc;  Industry 

— Consideration  of  Causes  and  Remedies    .        .   2()()-278 
Statistics  of  past  and  present  shipbuilding  in  the  United 
States,  266. — Relative  cost  of  American-  and  foreign-built 


XVI  CONTENTS 

PAGES 

ships,  268. — Causes  accounting  for  higher  costs  in  the 
United  States,  270. — Success  in  operating  ships  essential 
to  growth  of  shipbuilding  industry,  275. — All  .shipbuilding 
materials  ought  to  be  admitted  free,  276. — Ship  construc- 
tion bounties  of  France,  277. — Objections  to  construction 
bounties,  278. — References  for  further  reading,  278. 

CHAPTER    XX 

Causes  of  the  Decline  of  the  American  Marine  in 

THE  Foreign  Trade 279-287 

Decline  in  the  registered  tonnage  of  American  shipping 
since  1861,  279. — Causes  accounting  for  the  decline,  280. — 
Substitution  of  iron  and  steam  for  wood  and  sails,  280. — 
History  of  national  shipping  subsidies,  281. — Effects  of  the 
Civil  War,  282. — Shipping  policy  of  Congress  after  the  Civil 
War,  283.— Navy  neglected  from  1865  to  1885,  284.— Effect 
of  subsidies  granted  by  foreign  countries,  285. — Decline  in 
American  shipping  due  mainly  to  economic  causes,  285. — 
References  for  further  reading,  287. 

CHAPTER   XXI 

Government  Aid  to  Shipping  and  Navigation  in 
France,  the  United  Kingdom,  Germany,  and 
Japan 288-300 

French  bounties  to  fisheries,  288. — French  construction  and 
navigation  bounties,  Acts  of  1881  and  1893,  288. — Provisions 
of  the  Act  of  1902,  290. — French  payments  for  carrj-ing 
ocean  mails,  291. — British  subventions  for  naval  reserves, 
292. — British  Admiralty  subventions,  293. — British  mail  sub- 
sidies, 294. — Subsidy  granted  Cunard  Steamship  Company 
in  1903,  295. — Germany's  mail  subventions  to  particular 
hnes,  296. — Reduced  railroad  rates  to  aid  foreign  trade  and 
domestic  shipbuilding,  297. — Results  of  Germany's  policy, 
297. — Japan's  ship  construction  bounties,  Act  of  1896,  298. 
— Navigation  bounties,  Acts  of  1896  and  1899,  299. — Special 
mail  subventions  under  Act  of  1899,  299. — Success  of  Japa- 
nese marine  policy,  300. — References  for  further  reading, 
300. 


CONTENTS  xvii 

PAGES 

CHAPTER    XXII 

The  Meuchant  Marine  Question 301-310 

Distinction  between  general  bounties  and  special  subven- 
tions, 301. — Arguments  in  favor  of  general  bounties,  301. — 
Objections  to  general  bounties,  302. — Policy  of  special  suIj- 
ventions  to  particular  lines  recoinineiuled  for  the  United 
States,  305. — Expenses  of  this  j>olicy  compared  with  present 
expenditures  made  to  aid  shipping  by  the  United  Kingdom, 
Japan,  Germany,  and  France,  307. — Subventions  for  naval 
reserves  recommended,  308. — Sununary  of  policy  advo- 
cated, 308. — References  for  further  reading,  310. 

CHAPTER    XXIII 

The    Future    Outlook    for    Ameuican    Siiipruildino 

AND  Maritime  Interests 311-320 

Conditions  determining  success  in  building  and  operating 
ships,  311. — The  geographic  basis  for  American  shipl)uilding, 
312. — The  economic  basis  of  American  shipbuilding  and 
shipping,  314. — Abundance  of  capital  for  investment,  31.5. — 
Handicap  of  higher  labor  costs,  310;  of  higher  costs  of 
operation  imder  the  American  flag,  317. — The  political 
forces  are  favorable  to  the  maritime  .success  of  the  United 
States,  317. — The  favorable  psychological  basis,  319. 


BOOK   TWO.— CANAL,   RIVER,   AND   LAKE  TRANSPOR- 
TATION 

CHAPTER   XXIV 

The  Inland  Wati^rways  in  the  United  States    .        .  323-337 

Compari.son  of  the  foreign  and  domestic  trade  of  the  United 
States,  323. — Railways  and  waterways  contrasted,  324. — 
Inland  waterways  clas.sified,  32.5. -De.scription  of  the  chief 
navigable  rivers  in  the  United  States,  320. — The  Great 
Lakes  de.scribed,  330. — ^The  canals  in  the  United  States, 
332. — Map  of  the  canals  in  New  York  State,  335.- -Refer- 
ences for  further  reading,  337. 


XVIU  CONTENTS 


CHAPTER    XXV 

The  Improvement  and  Maintenance  of  Inland  Water- 
ways IN  THE  United  States 338-344 

Legal  definition  of  "navigable  waterways,"  338. — Canal 
construction  left  mostly  to  the  States  and  to  corporations, 
338. — History  of  canal  construction  in  the  United  States, 
339. — Federal  "internal  improvement"  policy,  342. — Fed- 
eral appropriations  for,  and  improvement  of  rivers  and  har- 
bors, 342. — References  for  further  reading,  343. 


CHAPTER   XXVI 

The  Organization  of  the  Service  and  the  Equip- 
ment Employed  on  Inland  Waterways         .        .   345-358 

Equipment  employed  on  canals,  345. — Organization  of 
canal  transportation,  346. — Equipment  employed  on  rivers, 
347. — Organization  of  river  transportation,  347. — Coal 
traffic  service  on  the  Ohio,  348. — Equipment  on  the  Great 
Lakes,  350. — Organization  of  lake  transportation  ser\'ice, 
353. — Lake  lines  controlled  by  railroads,  353. — The  tendency 
toward  the  consolidation  of  lake  carriers,  356. — The  Lake 
Carriers'  Association  and  the  Association  of  Lake  Lines, 
357. — References  for  further  reading,  358. 


CHAPTER    XXVII 

Traffic  on  the  Inland  Waterways  of  the  L^nited 

States        359-373 

Statistics  of  total  traffic  not  available,  359. — Traffic  on  New 
York  canals,  360;  on  the  Ohio  and  Illinoisi  canals,  360. — 
Traffic  on  the  Hudson,  Ohio,  and  Missi.ssippi  rivers,  361.^- 
Coal  traffic  on  the  Ohio,  362. — Volume  of  commerce  on  the 
Great  Lakes,  365. — The  sail  and  steam  tonnage  on  the 
Great  Lakes,  366. — Characteristics  of  the  lake  traffic,  367. 
— ^Traffic  of  railroads  and  waterways  compared,  370. — Con- 
ditions requisite  to  the  growth  of  the  traffic  of  inland  water- 
ways, 371. — References  for  further  reading,  372. 


CONTENTS  XIX 


CHAPTER   XXVIII 

The  Relations  of  Ini-and  W'atkuwav.s  and  Railroads 

AS  Cakuieks 374-379 

Waterways  are  l)()(li  conipetitor.s  and  complements  of  rail- 
roads, 374. — liiflueiice  of  waterways  upon  railroad  rates, 
375.  —  Waterways  as  complements  to  railroads,  377. — 
The  coordination  of  railways  and  waterways  is  desirable, 
378. — References  for  further  reading,  379. 


CHAPTER    XXIX 

The   Future   of   Inland    Water   Tran.si'ohtation   in 

THE  United  States 3SO-3S5 

Canal  improvements  in  progress  in  New  York  and  Ohio,  380. 
— 'The  continued  impro\ement  of  the  Great  Lakes  unques- 
tionably advisable,  380. — The  larger  rivers  ought  to  be 
further  improved,  381. — Canals  accommodating  1,000-toii 
barges  should  connect  our  largest  natural  waterways,  383. 
— The  future  services  of  inland  waterways,  384. 


INDEX .  387 


LIST   OF   ILLUSTRATIONS,  MAPS,  AND   EXHIBITS 


ILLUSTRATIONS 


Aft 


ins 


Marine  E 


The  Lugger 

The  Ketch 

The  Three-Masted  Schooner  Hall  . 

The  Siiuare-Rigged  Ship  The  Great  Republic 

The  Seveu-Masted  Schooner  Tliomas  W .  Lau'son 

Side  Lever  Type  of  Marine  P^ngine 

The  O.scillating-Geared  lOngine 

Geared  lieam  Engine,  constructed  in  lS5o 

The  Trunk  Engine 

The  Quadruple-Expansion  Inverted  Direct 

The  Marine  Boiler 

A  Parsons  Turbine  Engine 

Ocean  Bill  of  Lading        .... 

Receipt  for  Freight  for  Ocean  Shipment 

Invoice  of  Ocean  Shi])nient    . 

Manifest  of  Ocean  Shipment  . 

Clearance  of  a  Vessel  to  a  Foreign  Port 

Bill  of  Health    .        .  .        . 

The  Amerika  of  the  Hamburg-American  Line 

Immigrant  Station,  l"^llis  Lsland,  New  York 

The  Carmania 

The  Turbine  Engines  of  the  Carmania 
Cross-Section  of  the  Carmania 
Arrangement    of    the    Engines,    Shafts, 

Carmania 

One  of  the  Carmania' s  Propeller  Shafts 

Expre.ss  Receipt 

Expres.s  Company's  Export  Bill  of  Lading 
Express  Company's  Way  l^ill 
Shipper's  Invoice  or  Manifest  of  Goods  lOxported  by  Express 

XX  i 


Harbor 


Vn 


jdcid 


leilers    of 


the 


(innij 
1! 


PAGE 

15 
16 
17 
•JO 


30 
31 
33 
34 

35 
30 

m 


7S 
80 
82 
S9 
91 
•>3 
94 
95 


9r. 

97 
lOS 

)  r_'() 
iji 

122 


xxii  LIST    OF    ILLUSTRATIONS 

PAGE 

Charter  Party 175-177 

Lloyd's  Form  of  Policy 205 

Vessel  Policy  of  Atlantic  Mutual  Insurance  Company  .  faring  202 
The  Steamboat  Spragve  Run  on  the  Ohio  and  Mississippi  Rivers  .  349 
Fast  Plant  in  Operation  at  Conneaut,  Ohio,  for  Handling  Ore  .  351 
Fast  Plant  for  Handling  Material  at  Port  Morris,  X.  Y.,  for  the 

New  York  Central  Railroad  Company 352 

The  Delaicare 355 

The  Ohio  River  Steamboat  Joseph  B.  William.t  Pushing  a  Tow  of 

58,120  Tons  of  Coal  Down  the  Mississippi  River        .        .        .   363 


MAPS 

Map  Showing  Effect  of  the  Panama  Canal  on  Ocean  Routes,  facing     50 
Map  Showing  Present  and  Proposed  Canal  System  of  New  York 
State 335 


EXHIBITS 

Table  Showing  the  Effective  Power  Obtained  by  Marine  Engines 
at  Different  Dates  from  the  Combustion  of  One  Pound  of  Coal   .      37 

Table  of  Distances  via  the  Panama  Canal  and  via  Existing  Routes     51 

Table  of  Distances  from  Liverpool  and  New  York  via  the  Cape 
of  Good  Hope,  and  the  Suez  Canal  to  Tj^pical  Eastern  Ports    .      52 

Table  Showing  the  Percentage  Fluctuations  in  Freight  Rates  frona 
the  Ignited  Kingdom,  1884-1903,  with  Percentage  Fluctuations 
in  Wholesale  Prices  of  Commodities 184 

Chart  Showing  Fluctuations  in  Ocean  Freight  Rates,  1884-1903    .    185 

Table  of  Mean  Annual  Steamship  Rates  from  New  York  to  Liver- 
pool on  Grain,  Flour,  Beef,  and  Pork  from  1884  to  1903  Inclu- 
sive          187 

Chart  Showing  Mean  Annual  Ocean  Rates  on  Grain  (Wheat)  from 
New  York  to  Liverpool,  1884  to  1903 187 

Tables  of  Port  and  Terminal  Charges 247-251 

Table  of  Steam  Tonnage  of  the  Great  Lake  Fleet  !)y  Five- Year 
Periods  from  1870  to  1905 366 

Chart  Showing  Traffic  Passing  the  Sault  Ste.  Marie  from  1881  to 
1905 367 


BOOK    ONE 

OCEAN  TRANSPORTATION 

INTRODUCTION 


INTRODUCTION 

Ocean  transportation  may  lie  treated  cither  as  a 
tcclinical  subject  or  as  a  division  of  economics.  Con- 
sidered in  its  technical  aspects,  the  study  is  conccrneil 
either  with  marine  enjiincerin^  or  with  the  art  of  navi- 
gation. The  economics  of  the  subject  has  to  do  with  the 
service  of  ocean  transportation.  The  study  iuchuU's  the 
relations  of  ocean  carriers  with  each  other,  with  the 
traveling  and  shipj)inG;  public,  and  with  the  (lovernment 
whose  duty  it  is  to  aid  and  regulate  the  business  of  ocean 
carriage. 

Much  more  has  been  written  on  the  technics  than  on 
the  economics  of  ocean  transportation;  indeed,  most  non- 
technical treatises  on  ocean  transportation  have  been 
either  historical  or  statistical  in  character.  Hook  One  of 
this  volume  is  an  economic  treatise  dealing  with  the  «K-can 
transportation  service.  It  contains  but  a  brief  account 
of  the  history  of  shipping,  and  presents  only  such  statistics 
regarding  traffic  as  arc  required  to  indicate  the  mitui'c  and 
scope  of  the  service. 

The  history  and  description  of  the  ocean  ti'ansporta- 
tion  system  having  been  bridly  prcscntccl  in  I'ai-t  1.  the 
freight,  passenger,  mail,  and  intci'uational  express  serv- 
ices of  ocean  carriers  are  considere(l  in  Part  11.  The 
thii'd  division  of  IJook  One  is  coiicci'ikmI  with  the  I'cla- 
tions  of  ocean  carriers  with  each  other  aTid  with  the  j)ui>- 
lic,  with  the  organization  of  ocean  transjiortati(^ti,  com- 
petition and  monopoly,  agreements  of  ocean  carricu's  with 
each  other  and  with  railroads,  ocean  rates  and  fari's,  anil 

3 


4         OCEAN   AND   INLAND   WATER  TRANSPORTATION 

marine  insurance.  The  last  division  of  Book  One  dis- 
cusses Government  aid  and  regulation,  analyzes  the  causes 
accounting  for  the  decline  of  the  American  merchant 
marine,  and  considers  the  various  legislative  methods  of 
promoting  the  shipbuilding  and  maritime  interests  of  the 
United  States. 

Ocean  transportation  has  been  less  thoroughly  and 
systematically  studied  in  the  United  States  than  has  rail- 
way transportation.  Well-known  facts  of  American  his- 
tory readily  account  for  this.  For  nearly  a  century  the 
energies  of  the  American  people  have  been  devoted 
mainly  to  the  occupation  of  their  wide  territory,  and  to 
opening  up  for  present  and  future  development  the  vast 
natural  resources  of  their  country.  The  phenomenal 
rapidity  with  which  this  work  of  subjugating  a  continent 
and  of  taking  possession  of  its  natural  wealth  has  pro- 
ceeded has  been  made  possible  by  the  railroad.  In  no 
other  country  has  the  railway  net  been  spread  so  rapidly, 
and  nowhere  else  has  the  economic  progress  been  so  great. 

It  is,  accordingh',  not  surprising  that  lawmaker,  his- 
torian, and  economist,  as  well  as  capitalist,  have,  until 
recently,  interested  themselves  more  in  railway  transporta- 
tion than  in  inland  navigation  or  ocean  transportation; 
that  American  transportation  legislation  and  literature, 
both  past  and  current,  give  far  more  attention  to  the 
technical,  economic,  and  political  aspects  of  the  railroad 
service  than  to  the  development  and  management  of  the 
business  of  ocean  carriage.  It  is  a  noticeable  fact,  li<nv- 
ever,  that  there  is  an  increasing  public  ap])reciation  of 
the  importance  of  the  development  of  the  shipbuilding  and 
maritime  interests  of  the  United  States.  Having  sup- 
plied our  country  with  an  adequate  and  highly  efficient 
railroad  system,  and  having  arrived — as  we  now  appar- 
ently have — at  a  clear  understanding  of  the  problem  of 
equitably  adjusting  the  relations  of  railroad  carriers  to 


INTRODUCTION  5 

the  public,  our  attention  is  naturally  turning  to  a  study 
of  the  economics  of  ocean  transportation,  and  to  the  leg- 
islative problems  connected  with  securing  an  American 
merchant  marine  that  will  correspond  in  size  and  rate 
of  growth  with  our  hirge  and  steadily  increasing  foreign 
commerce. 

The  transportation  problem  of  the  past  half  century 
in  the  United  States  has  consisted  mainly  of  securing  the 
construction  of  railroads  and  solving  the  question  of  their 
]n*oper  and  adequate  regulation  by  the  Government.  Tlif 
cliief  American  transportation  problem  of  the  ensuing 
twenty-five  or  fifty  3'ears  promises  to  be  the  development 
of  a  merchant  marine  conunensurate  with  our  commer- 
cial needs,  and  the  discovery  and  application  by  our  Gov- 
ernment of  the  maritime  policy  that  will  best  promote 
our  economic  and  political  progress.  Our  economic  in- 
terests have  overrun  our  home  boundaries;  our  political 
obligations  and  ideals  have  become  international  with 
surprising  swiftness;  and  whether  we  will  or  not,  we  shall 
perforce  be  obliged  to  shape  our  industrial  progress  and 
our  political  institutions  more  and  more  in  accordance 
with  international  requirements. 

Without  doubt,  we  shall  sooner  or  later  become  a 
great  maritime  nation;  not  onl}'  because  we  shall  have  a 
large  foreign  commerce  to  be  transported,  and,  imlccd, 
Jiot  primarily  because  our  political  interests  will  necessi- 
tate our  having  a  strong  navy,  but  more  and  chiefly 
because  the  accumulation  of  cn])itnl  at  In 'inc.  and  the 
widesj)read  investment  of  American  capital  in  I'orcign 
(•(tiinti'ics,  will  steadily  create  more  fiivoi'aMe  conditions 
for  Aiiicricnii  slii|i|iliig  and  sliiplniildiiig,  ;inil  will  give 
the  American  |)eo|)lc  increasingly  sti'oiiger  I'casons  tor 
engaging  in  ocean  transportation.  Our  economic  an<l 
])olitical  evolntion,  it  seems  certain,  will  eventually  make 
us  a  mai'itime  nation. 


6  OCEAN  AND  INLAND  WATER  TRANSPORTATION 

The  "  mcrclunit  marine  (luestion,"  as  a  political  prob- 
lem, is  one  of  deciding  whether,  and  how,  legislation  can 
shorten  our  road  to  maritime  success,  and  of  deciding 
whether  the  resuhs  that  may  be  accomj)lished  by  Govern- 
ment aid  to  ocean  transjjortation  will  justify  the  expense 
which  public  assistance  will  involve.  i>oth  political  and 
economic  factors  must  be  considered  in  solving  the  Ameri- 
can merchant  marine  question;  the  economics  of  the  serv- 
ice must  be  understood,  and  the  possibilities  and  limita- 
tions of  legislative  measures  in  aid  of  the  service  must  be 
known. 

The  discussion  of  the  economics  of  ocean  transporta- 
tion in  this  volume,  while  not  written  primarily  or  mainly 
for  the  purpose  of  illuminating  the  political  aspects  of  the 
merchant  marine  question,  ought,  by  dealing  systemati- 
cally with  the  ocean  transportation  service,  to  aid  in  reach- 
ing an  intelligent  decision  regarding  maritime  legislation. 
Indeed,  the  relations  of  the  national,  State,  and  local 
Governments  to  ocean  transportation  are  so  intimate  and 
vital  that  this  treatise  on  the  economics  of  ocean  trans- 
portation devotes  several  chapters  at  the  end  of  Book  One 
to  the  relation  of  the  Government  to  the  development  of 
the  merchant  marine. 


PART  I 
THE  OCEAN  TKANSPORTATION  SYSTEM 


CHAPTER    I 

THE    MEASUREMENT    OF    VESSELS    AND    TEAFFIC 
■2.7  3   (^  O 

In  describing  the  various  types  of  vessels,  and  in  dis- 
cnssing  ocean  transportation,  frequent  nse  must  be  made 
of  the  words  "  ton  "  and  "  tonnage,"  and,  in  order  to 
avoid  confusion  and  error,  it  is  necessary  to  keep  clearly 
in  mind  the  several  meanings  in  which  these  terms  are 
em])loyed.  Tonnage  may  refer  either  to  the  size  of  the 
vessel  or  to  the  amount  of  the  ship's  cargo;  accordingly, 
there  are  two  distinct  kinds  of  tons:  the  vessel  ton  and 
the  cargo  ton.  Each  of  these  two  kinds  of  tons  is  used 
with  several  different  meanings. 

Vessel  tonnage  is  of  three  kinds:  displacement,  gross 
register,  and  net  register.  The  displacement  tonnage  of 
a  vessel  is  its  weight,  and  is  equal  to  the  weight  of  water 
displaced  by  the  ship  when  floating.  The  gross  register 
tonnage  is  obtained  by  dividing  the  number  of  cubic  feet 
in  the  ca]iacity  of  the  ship  by  100.  A  vessel  has  one 
"gross  "  ton  for  each  100  cubic  feet  of  capacity.^  The 
net  register  tonnage  is  obtained  by  dividing  by  100  the 
capacity  in  cubic  feet  of  the  space  available  for  cargo 

'  This  method  of  determining  gross-register  tonnage  dates  from  1854. 
To  secure  a  vmiform  practice  in  measuring  and  registering  vessels  the 
British  (iovernment,  in  1852,  adopted  a  method  of  measuring  the  cubical 
capacity  of  hulls  that  a  Mr.  Moorsom  had  worked  out.  The  Admiralty, 
not  wishing  to  change  the  statistics  of  the  tomiage  of  the  British  marine 
more  than  was  necessary,  instructed  Mr.  Moorsom  to  submit  a  plan  of 
applying  his  method  in  such  a  way  as  to  cause  a  mininunn  change  in 
the  existing  registry  of  ships.  Mr.  Moorsom  found  that  the  total 
registered  tonnage  of  the  liritish  merchant  marine  as  then  registered 
was  3,700,000,  and  he  found  that  by  the  application  of  his  system  of 

9 


10       OCEAN   AND  INLAND  WATER  TRANSPORTATION 

and  passengers.  From  the  entire  capacity  of  the  ship 
are  deducted  the  spaces  occupied  by  machinery,  crew  ac- 
commodations, and  certain  other  housings,  carefully  des- 
ignated by  law;  and  then  the  number  of  cubic  feet  in 
the  remaining  capacity  is  divided  by  100  to  obtain  the 
net  register. 

In  the  shipping  statistics  of  all  countries  a  ton  gross 
register  means  100  cubic  feet  of  ship  capacity;  but  as 
the  rules  applied  in  measuring  the  capacity  are  not  iden- 
tical in  all  countries,  vessels  of  the  same  size  under  dif- 
ferent flags  may  vary  slightly  as  to  gross  tonnage.  In 
the  determination  of  the  figures  for  net  registry  the  laws 
of  different  countries  vary  more  than  they  do  in  regard 
to  gross  registry;  nevertheless,  witli  the  exception  of  the 
"  Danube  "  measurement,  which  is  applied  to  all  vessels 
passing  the  Suez  Canal,  the  British  practice  as  regards 
the  measurement  of  gross  and  net  tonnage  is  followed 
with  minor  variations  by  all  commercial  countries. 

The  rules  of  the  Danube  measurement  were  adopted 
at  Constantinople  in  1873  for  the  Suez  Canal  by  the  In- 
ternational Tonnage  Commission.  The  net  register  ton- 
nage of  vessels  when  measured  bv  the  Danube  rules  will 
average  fully  one-fifth  more  than  when  measured  in  ac- 
cordance with  British  or  American  laws.^  The  canal 
tolls  are  levied  on  net  tonnage. 

measurement  the  total  capacity  of  the  hulls  of  the  British  fleet  was 
363,412,456  cubic  feet.  "If,"  said  he,  "the  real  total  capacity  in  cubic 
feet  is  divided  by  the  total  registered  tonnage  the  dividend  will  be  the 
figure  by  which  the  capacity  in  cubic  feet  must  be  divided  in  order  to 
produce  this  registered  tonnage."  The  ratio  of  existing  tonnage 
(3,700,000)  to  Moorsom's  figures  for  capacity  (363.412,456)  was  98.22, 
but  for  the  purpose  of  easy  calculation  the  British  Government  adopted 
a  divisor  of  100  instead  of  98.22,  and  this  figure  was  incorporated  in  the 
Merchant  Shipping  Act  of  1S54. 

'  The  laws  of  the  United  States  regarding  the  measurement  of  vessels 
may  be  found  in  Sections  13  to  26  of  the  Navigation  Laws,  Bureau  of 
Navigation,  Department  of  Commerce  and  Labor,  Washington,  D.  C. 


THE   MEASUREMENT  OF  VESSELS  AND  TRAFFIC      11 

The  cargo  ton  is  of  two  classes,  weight  and  measure- 
ment. The  weight  ton  may  be  tlie  "  short  "  ton  of  2,000 
pounds,  the  "  long  "  ton  of  2,240  pounds,  or  the  metric 
ton  of  2,204.62  pounds.  The  traffic  of  American  rail- 
I'oads  and  waterways  (with  the  exception  of  anthracite 
coal,  which  is  handled  hy  the  long  ton  in  the  Eastern 
States)  is  measured  by  tlie  short  ton,  and  this  ton  is  the 
one  generally  used  within  tlie  United  States.  In  ocean 
connnerce  the  weight  ton  is  the  long  ton  of  2,240  pounds, 
except  in  the  trade  of  those  countries  that  use  the  metric 
system  and  employ  the  metric  ton  of  2,204.62  pounds. 

A  large  share  of  the  cargo  of  ocean  traffic  is  not 
shipped  by  weight,  ])ut  by  the  measurement  ton  of  40 
cubic  feet.  Grain  and  minerals  move  by  weight;  but 
manufactures,  general  merchandise,  and  even  lumber, 
are  regularly  handled  by  the  measurement  ton.  The 
adoption  of  40  cubic  feet  for  a  measurement  ton  is  said 
to  be  due  to  the  fact  that  a  long  ton  of  wheat  occupies 
40  cubic  feet  in  the  hold  or  berth  of  the  ship.  In  the 
Government  statistics  of  the  cargo  tonnage  of  ocean  com- 
merce, both  the  long  ton  and  the  measurement  ton  are 
included,  and  it  is  not  possible  to  ascertain  the  actual 
weight  of  the  traffic  of  ocean  commerce. 

The  ratio  of  net  register  to  gross  register  tonnage 
and  cargo  tonnage  of  a  modern  freight  vessel  loaded  with 
general  cargo  is  as  1  to  1^  and  to  2:^.  The  net  register 
is  about  two  thirds  the  gross,  and  the  cargo  tonnage 
averages  about  2^  times  the  net  register.  In  the  large 
modern  sailing  vessel  the  net  register  is  about  seven 
eighths  of  tlie  gross,  and  the  cargo  tonnage  of  the  loadeJ 
vessel  will  average  about  1|  times  the  net  register. 

All   vessels   flying  the   American   flag   are   listed   and 

documented  by  the  United  States  Government.     Before 

a  vessel  can  Ix^  ])ut  into  service  its  machinery  must  be 

inspected,  and  the  ship  measured,  by  officials  connected 

3 


12       OCEAN   AND   INLAND   WATER  TRANSPORTATION 

witli  tlie  Bureau  of  Navigation  in  tlic  Department  of 
Commerce  and  Labor.  The  vessels  engaged  in  foreign 
commerce  are  "  registered,"  and  those  employed  in  our 
inland  and  coastwise  commerce  are  "  enrolled."  All  ves- 
sels of  less  than  20  tons  measurement  are  "  licensed."  It 
is  customary  to  use  the  term  ""  registered  "  tonnage  when 
speaking  of  our  shipping  engaged  in  foreign  trade,  and  of 
"  enrolled  "  tonnage  when  referring  to  our  domestic 
vessels. 


CHAPTEK    II 

THE    HISTOKY    Ul"    THE    UCEAX    CAKRIER THE    SAILING 

VESSEL 

The  brief  sketch  of  the  tcchnica]  history  of  ocean 
transportation  presented  in  this  and  the  following  cha])- 
ter  is  written  with  reference  to  the  transportation  of  the 
maritime  commerce  of  the  British  colonies  in  America 
and  of  the  United  States.  The  account  is  confined  to  the 
period  since  the  beginning  of  the  seventeenth  centurs^ 
and  contains  a  description  of  the  several  types  of  ocean 
carriers  that  have  been  successively  employed  by  Ameri- 
cans for  the  cai'riage  of  their  domestic  and  foreign  com- 
merce. 

The  two  general  types  of  vessels  now  used  in  ocean 
commerce,  the  sailing  vessel  and  the  steamer,  have  passed 
through  numerous  stages  in  reaching  their  present  highly 
efficient  forms,  and  a  brief  study  of  the  evolution  of  the 
sailing  vessel  during  the  past  three  hundred  years,  and 
of  the  steamship  during  the  past  century,  will  throw  light 
upon  the  history  of  the  service  as  well  as  of  the  agent  of 
ocean  transportation.  In  general,  the  agencies  employed 
are  developed  with  reference  to  the  service;  and  they 
indicate,  at  least  in  a  rough  way,  the  nature  and  impor- 
tance of  the  transportation  services  performed  from  period 
to  period. 

The  ship  is  a  tool  or  mechanism  used  mainly  by  ship- 
pers to  accomplish  commercial  exchanges.  The  adapta- 
tion of  the  mechanism  to  the  work  to  be  performed  has 

13 


14       OCEAN   AND   INLAND   WATER  TRANSPORTATION 

been  far  more  rapid  (hiriiiii  tlie  past  fifty  years  than  dur- 
ing previous  periods;  hut  at  all  times  shipwrights  must 
have  striven  to  build  as  ctHcient  ships  as  the  technical 
knowledge  and  material  resources  at  the  command  of  the 
builders  would  permit  them  to  construct.  It  is  a  fact 
sometimes  overlooked,  that  tlu^  prcsciit-dav  ()i-gaiii/.ati(Ui 
and  management  of  domestic  and  lorcigii  ii'adc  necessi- 
tate the  use  of  types  of  vessels  very  unlike  those  reiiuired 
by  traders  a  hundred  years  ago.  While  it  is  true  that 
the  technical  improvements  in  transportation  and  com- 
nnmication  facilities  have  made  possible  the  existing  or- 
ganization of  commerce,  it  is  equally  true  that  the  size 
and  character  of  ships  now  being  built  are  determined  by 
the  requirements  of  trade.  This  fact  Avill  be  illustrated 
in  later  chapters. 

Until  the  fifth  decade  of  the  nineteenth  century  the 
sailing  vessel  was  the  only  ship  employed  in  ocean  com- 
merce. In  its  technical  evolution  numerous  types  have 
been  successively  constructed,  to  each  of  which  special 
terms  were  applied  that  need  to  be  explained  in  order 
to  be  understood  by  the  landsman  who  has  not  made  a 
study  of  nautical  phraseology.  The  various  kinds  of 
sailing  vessels  are  classified  mainly  according  to  the  num- 
ber of  masts  the  vessel  has,  and  the  rig  of  its  sails.  The 
shape  of  the  bow  and  hull  (as  in  the  case  of  the  "  clipper 
ship  ")  may  also  account  for  the  name  given  to  the  type 
of  ship. 

There  are  two  methods  of  rigging  the  sails  on  the 
masts.  In  the  "  square-rigged "  vessel,  the  yards  or 
beams  to  which  the  sails  are  attached  are  so  suspended 
from  the  mast  as  to  cross  the  mast  and  extend  equal  dis- 
tances on  each  side ;  while  in  the  ''  fore-and-aft  "  rig  the 
yardarms  by  which  the  sails  are  spread  do  not  cross  the 
mast,  but  extend  from  only  one  side  of  the  mast. 

A  full-rigged  "  ship  "  is  a  sailing  vessel  having  three 


THE  SAILING  VESSEL 


15 


or  more  masts,  on  all  of  which  the  sails  are  square-rigged. 
A  three-masted  vessel  having  its  two  forward  masts — the 
fore  and  main  masts — square-rigged,  and  its  after-  or 
mizzenmast  fore-and-aft  rigged,  is  a  bark.  A  barkentine 
lias  the  foremast  square-rigged  and  the  main-  and  mizzen- 
masts  rigged  fore-and-aft.     A  brig  is  a  vessel  with  two 


The  Lugger. 


masts  both  square-rigged.  A  brigantine  differs  from  the 
l)rig  in  having  the  aftermast  fore-and-aft  rigged. 

The  vessels  having  only  the  fore-and-aft  rig  are  the 
sloo])  and  schooner.  The  sloop  has  but  one  mast;  the 
schooner  has  two  or  more.  Schooners  having  five,  six, 
and  even  seven  masts,  have  been  constructed  during  the 
past  few  years. 

\t  the  time  of  the  settlenumt  of  America,  early  in  the 
seventeenth  century,  the  largest  ocean  vessels  were  the 
full-rigged  ship  and  the  bark;  the  brig  or  brigantine  of 
less  than  100  tons  hui-den  was  nioi'e  frecpiently  used. 
The  coasting  vessels  most  used  by  the  English  were  the 
sloop,  the  lugger,  and  the  ketch.      The  lugger  had  one  or 


IG       OCEAN  AND   INLAND  WATER  TRANSPORTATION 

two  masts,  each  rigged  with  square  or  hig  sail.  The 
ketch  had  two  masts — "  one  tall  mast,  with  two  or  more 
crossed  yards,  set  well  back  from  the  bow  toward  amid- 
ships, and  a  smaller  mast,  also  with  square  sails,  nearer 


The   Ketch. 

the  stern."  ^  The  chief  merit  of  the  ketch  was  that  there 
were  two  sails  on  each  mast,  instead  of  one  heavy,  un- 
wieldy lug  sail.  In  some  ketches  there  were  both  square 
and  fore-and-aft  sails  in  the  rigging.  The  American 
colonists  used  the  ketch  for  their  coasting  trade,  until 
they  designed  the  far  more  seryiceable  schooner.  The 
ketch  was  a  slow^  yessel,  and  its  square  sails  were  handled 
with  difficulty  upon  its  narrow  deck. 

The  first  schooner  was  built  in  ITIS  or  1714,  by  Cap- 
tain Andrew  Robinson,  at  Gloucester,  Mass.,  and  is  some- 
times called  the  Gloucester  schooner.      It  had  two  masts, 

'  Marvin,  "The  American  Merchant  Marine,"  p.  22. 


THE  SAILING  VESSEL 


17 


each  bearing  a  fore-and-aft  sail,  there  being  a  jib  sail 
forward.  The  lines  of  the  schooner  were  sharper  than 
those  of  its  predecessors;  it  could  sail  faster  and  closer 
to  the  wind,  and  could  be  managed  by  fewer  hands  than 
the  s(|uare-rigged  vessels  required.  The  economy  and 
the  efficiency  of  the  schooner  were  soon  recognized  in 
America,  especially  in  the  coasting  trade.  The  vessels 
used  for  the  transoceanic  trade  did  not  abandon  the  scjuare 
sails  after  the  appearance  of  the  schooner,  but  modified 
their  rigging  by  using  both  square  and  fore-and-aft  sails. 
According  to  Marvin:  ^  "  For  many  years  after  1813  the 


The  Thhee-Masted  Schooner  Hall. 

American  schooner  represented  a  compromise.  The  pre- 
vailing type  was  the  so-called  topsail  schooner,  carrying 
the  Robinson  fore-and-aft  foresail  and  mainsail,  but  bear- 
ing on  the  foremast  a  lower  and  a  topsail,  and  sometimes 


'  "The  American  Merchant  Marine,"  p.  23. 


18       OCEAN   AND   INLAND   WATER  TRAI^PORTATION 

a  topgallant  yard,^  and  thus  combining  the  good  qualities 
of  tlie  fore-and-aft  and  the  sciuare  rig.  It  was  the  topsail 
schooners  which  were  tlie  favorite  privateers  of  the  Revo- 
lution and  the  War  of  \x\2.  " 

The  character  of  the  shipping  constructed  in  America 
near  the  close  of  the  colonial  period  is  illustrated  hy  the 
figures  for  1769,  during  which  year  113  square-rigged 
vessels  and  276  sloops  and  schooners  were  built.  The 
tonnage  of  these  389  vessels  was  20.001. 

Reference  is  here  made  to  but  a  few  of  the  leading 
types  of  sailing  craft,  and  to  only  the  most  important 
changes  in  the  rig  and  construction.  At  the  beginning 
of  the  seventeenth  century  the  ships  were  of  the  caravel 
type  of  construction,  with  a  high  cabin  structure  above 
the  deck  aft  and  a  high  forecastle  forward.  These  super- 
structures lessened  the  seaworthiness  of  the  ship  and  made 
sailing  against  opposing  winds  slow,  and,  in  the  case  of 
storms,  dangerous.  During  the  seventeenth  and  eight- 
eenth centuries  the  depth  of  the  ships  was  increased,  and 
the  practice  of  constructing  cabins  above  deck  was  gradu- 
ally abandoned. 

The  main  features  of  the  history  of  the  sailing  vessel 
during  the  nineteenth  century  were  (1)  the  growth  in  size 
and  the  improvement  in  the  sailing  qualities  of  the  square- 
rigged  ship;  (2)  the  development  of  numerous  important 
^^  packet  lines  "  with  vessels  sailing  at  regular  intervals 
to  handle  the  mails  and  to  carry  the  large  traffic  that 
accompanied  the  growth  of  the  United  States  after  the 
War  of  1812  to  1815;  (3)  the  development  of  the  schooner 
from  a  two-  or  three-masted  to  a  four-masted  wooden  ves- 
sel, and  then  to  a  five-,  six-,  or  seven-masted  steel  vessel; 


'  The  first  or  lowest  sail  on  the  mast  is  called  the  lower  sail,  the  second 
one  the  topsail,  the  third  the  topgallant.  The  large  full-rigged  ship 
may  carry  a  fourth  or  royal  sail,  and  even  a  fifth  or  skysail.  The  lower 
sails  on  the  fore  and  main  masts  were  the  foresail  and  mainsail. 


THE  SAILING  VESSEL  19 

(4)  the  gradual  and  steady  substitution  of  steamers  for 
the  ship  and  the  schooner  in  both  oversea  and  coastwise 
eonnnerce. 

At  the  beginning  of  the  nineteenth  century  tiie  sail- 
ing vessel  was  still  relatively  small;  oOO  tons  was  consid- 
ered a  large  register  even  for  a  full-rigged  ship,  although 
shi])s  of  larger  tonnage  had  been  constructed.  At  Salem, 
Mass.,  for  example — the  center  of  our  important  East 
India  trade  during  the  half  century  following  the  Revo- 
lutionary War — the  largest  ship  in  the  merchant  fleet  as 
late  as  1825  was  of  400  tons.  The  rich  trade  of  Salem 
with  the  far  East  was  built  up  by  the  use  of  ships  aver- 
aging less  than  300  tons. 

The  traffic  between  New  York  and  England  first  led 
to  the  construction  of  the  large  sailing  ships,  as  it  has 
later  caused  the  largest  steamers  to  be  built.  At  the 
close  of  the  War  of  1812-15,  ships  of  400  to  500  tons 
were  put  into  service,  and  the  size  was  steadily  increased 
until  about  1840,  when  double-decked  ships  of  1,000  tons 
were  being  sailed.  The  first  three-decker,  the  Guy  Man- 
nering,  was  built  in  1849,  with  a  tonnage  of  1,419. 
Between  1850  and  1860  a  ship  of  1,500  tons  gross  reg- 
ister was  not  phenomenally  large;  indeed,  some  as  large 
as  2,500  tons  were  launched  and  successfully  operated. 
After  the  discovery  of  gold  in  California  the  traffic 
between  our  Atlantic  and  Pacific  seaboards,  as  well  as 
the  transatlantic  business,  caused  a  demand  for  spacious 
and  swift  sailing  vessels. 

The  large  ships  built  at  the  close  of  the  War  of 
1812-15  were  those  constructed  for  the  American  trans- 
atlantic lines  that  operated  their  ships  according  to  a  fixed 
schedule  of  sailings.  The  vessels  connected  with  these 
lines  carried  the  mails,  and  for  that  reason  they  were 
called  "  packet "  ships.  The  lines  were  called  packet 
lines,  and  they  date  from  1815,  when  the  celebrated  Black 


20        OCEAN   AND   INLAND  WATER  TRANSPORTATION 

Ball  Line  from  New  York  to  Liver[)ool  was  started. 
JSTiimerous  other  important  packet  lines  were  soon  after- 
wards established  to  haiidh^  tlio  increasing  travel  and 
ti'aflic  that  resiilt('<l  from  the  iirowtli  of  the  Tnited  States. 
The  s(|iiai'('-ri_iiU(Ml  \csscl  readied  I  lie  jiciiie  of  its  de- 
velopment in  the  "  cli})p(  r  "  ships  \vlii(di  hcgan  to  he  con- 
structed abont  1845.  The  (dijjper  was  hnilt  with  sharp 
lines  to  give  it  the  maximnm  speed,  and  it  had  a  long 
overhanging-  stem  or  prow  from  which  the  ship  derived 


The  Square-Rigged  Ship,  The  Great  Republic. 


its  name.  (See  cut  shown  above.)  As  the  first  vessels 
of  this  type  were  built  in  Baltimore,  the  term  "  Bal- 
timore Cli})per  "  Avas  sometimes  employed.  The  two 
causes  that  led  to  the  construction  of  the  first  clipper 
ships  were  the  trade  with  China  and  India,  and  the  com- 
petition of  the  steamships  in  the  North  Atlantic  trade. 
In  order  to  hold  the  trade  with  the  far  East  against  the 
competition  of  foreign  sailing  vessels,  and  to  retain  the 
traffic  between  the  United  States  and  Europe  against  the 
rivalry  of  the  steamship  lines  that  were  being  rapidly  es- 


THE  SAILING   VESSEL  21 

tablished,  the  American  sliipwrights  designed  the  fleet 
clipper  ships  which  for  a  decade  and  a  half  were  the  pride 
of  American  sailors.  The  demand  for  clipper  ships  was 
greatly  increased  bv  two  other  events:  the  rush  of  ]ieo- 
ple,  in  184!)  and  1850,  to  the  newly  discovered  gold  fields 
of  California  pnt  a  preminm  on  speed,  and  clipper  ships 
were  rapidly  constrncted  for  the  JSTew  York  and  San  Fran- 
cisco service  via  Capo  Horn.  AYlien  the  demands  of  that 
traffic  had  been  met,  the  Crimean  War  broke  out  in  1854, 
and  France  and  the  United  Kingdom  bought  a  large  ton- 
nage of  American  ships  to  use  as  transports.  In  1855 
there  were  583,450  gross  tons  of  shipping  constructed  in 
American  yards,  a  greater  total  than  has  been  reached 
any  year  before  or  since. 

Since  1858,  and  particularly  since  the  close  of  the 
Civil  War,  the  construction  of  square-rigged  vessels — 
ships,  barks,  barkentines,  and  brigs — has  tended  to  fall 
off,  the  preference  of  builders  being  given  to  schooners. 
Since  1885  almost  all  the  sailing  vessels  launched  have 
been  schooner-rigged.  The  huge  five-  to  seven-masted 
sailing  vessels  constructed  from  1899  to  the  present  time 
have  mainly  been  schooners,  and  they  bear  little  resem- 
blance to  the  typical  wooden  sailing  vessel  of  fifty  years 
ago.  The  largest  schooner  afloat  (there  are  others  nearly 
as  large)  is  the  Thomas  ^y .  Laivson.  It  has  seven  masts, 
and  measures  5,218  tons  gross  and  4,914  tons  net.  It 
can  carry  from  7,000  to  8,000  tons  of  cargo.  The  length 
over  all  is  375  feet,  the  beam  50  feet,  the  draft  loaded 
23  feet.  The  masts  are  195  feet  high,  the  first  135  feet 
being  steel  and  the  top  60  feet  wood.  I'he  maximum 
possible  spread  of  sail  is  43,000  square  feet,  an  area  about 
equal  to  an  acre.  Dummy  engines  are  employed  to 
handle  the  sails,  to  work  the  rudder,  to  load  and  unload 
the  cargo,  and  for  numerous  other  purposes.  The  ves- 
sel is  as  up-to-date  in  its  appointments  as  is  the  most  mod- 


22       OCEAN  AND   INLAND  WATER  TRANSPORTATION 


em  freight  steamer,  about  the  only  difference  between 
the  two  vessels  being  in  the  motor  power  employed. 

The  rule  of  the  sailing  vessel  in  American  commerce 
is,  however,  a  narrowing  one;  and  it  is  not  probable  that 
e.ven  the  construction  of  huge  steel  schooners  will  enable 
the  sailing  vessel  to  hold  its  own  in  competition  with  steam 
power.     Although  the  mercantile  marine  under  the  flag 


The  Seven-Masted  Schooner,  Thomas  W.  Lairson. 

of  the  United  States  contains  a  larger  proportion  of  sail 
tonnage  as  comparo(l  with  steamers  than  is  true  of  the 
marines  of  most  countries,  five  eighths  of  our  tonnage  en- 
gaged in  foreign  trade  and  three  fifths  of  our  domestic 
fleet  consist  of  steamers.  The  substitution  of  steam  for 
sail  has  been  going  on  steadily  for  a  long  time,  and  dur- 
ing recent  years  the  change  has  been  especially  rapid. 
From  15)00  to  1904  our  sail  tonnage  in  the  foreign  trade 


THE   SAILING   VESSEL  23 

fell  off  140,7-iO  tons  gross,  while  the  steam  tonnage  in- 
creased 212,814  tons  gross.  During  the  same  four  years 
the  sail  tonnage  of  our  domestic  fleet,  exclusive  of  canal 
boats  and  barges,  increased  202,985  tons,  while  the 
figures  for  the  steamers  rose  715,103. 

The  total  sail  tonnage  of  the  domestic  fleet  has  not 
yet  begun  to  decline,  but  the  rapid  growth  of  our  domes- 
tic fleet  is  due  mainly  to  the  construction  of  steamers. 
Indeed,  there  has  been  less  increase  in  the  sail  fleet  than 
the  figures  just  given  indicate,  because  the  large  schooner- 
rigged  barges  on  the  Great  Lakes,  although  always  towed, 
are  classed  as  sailing  vessels  on  account  of  their  rig.  The 
steam  tonnage  of  our  domestic  fleet  in  1880  was  1,000,- 
000  tons;  in  1895,  2,000,000  tons;  and  in  190-4,  3,000,- 
000  tons;  the  gain  during  the  twenty-five  years  having 
been  200  per  cent;  whereas  the  tonnage  of  our  enrolled 
sailing  vessels,  including  barges,  Avas  2,278,861  tons  in 
1904,  the  increase  since  1880  having  been  only  43  per 
cent.  The  sail  tonnage  is  still  increasing  absolutely,  but 
is  declining  in  comparison  with  steam  tonnage. 

In  the  merchant  marine  of  the  world  as  a  whole,  the 
tonnage  of  steamers  first  exceeded  that  of  sailing  vessels 
in  1893;  but  during  the  following  eleven  years  the  change 
was  so  rapid  that  the  sail  tonnage  of  1904  was  only  three 
fourths  that  of  1893,  while  the  steam  tonnage  had  nearly 
doubled.  At  the  present  time  about  one  fourth  of  the 
Avorld's  tonnage  is  sail,  and  about  three  fourths  steam. 
The  speed  and  regularity  of  the  steamer's  movements  so 
exceed  those  of  the  sailing  vessel  that  fully  nine  tenths 
of  the  tonnage  of  the  world's  commerce  is  now  handled 
by  steamers. 

The  sailing  vessel  is  giving  way  to  the  steamer,  be- 
cause the  steamer  is  more  efficient  and  more  economical. 
Although  the  motor  power  of  the  sailing  vessel  costs  noth- 
ing, and  a  smaller  crew  is  required  to  operate  a  sailing 


24       OCEAN   AND  INLAND    WA'l  i:U   TRANSPORTATION 

vessel  than  a  steamer  of  ecjiial  tonnage,  these  advantages 
are  more  than  offset  h\  the  slow  average  speed  of  the 
sailing  ship,  and  the  uncertainty  as  to  the  time  of  deliver- 
ing cargo  assigned  to  a  sliij)  wliose  movements  dej)end 
n])on  winds  and  currents  instead  of  upon  its  own  propelling 
power.  At  the  [)r(!sent  time  a  steamer  is  considered  to 
have  on  the  average  four  times  the  elHciency  (as  a  freight 
carrier)  of  a  sailing  vessel  of  equal  tonmigc  This  is  what 
enables  the  steamer  to  take  trafhc  away  from  the  sailing- 
vessel,  despite  the  disadvantages  which  the  steamer  has  as 
regards  the  cost  of  coal,  the  large  amount  of  space  taken 
up  in  the  steamer  for  coal  l)unkers  and  machinery — one 
fourth  to  one  third  of  the  hull  capacity — and  the  some- 
what larger  crew^  required. 

As  will  be  shoAvn  in  the  following  chapter,  mechani- 
cal improvements  have  reduced  the  cost  of  steam  power 
to  a  surprisingly  low  figure.  This  fact  is  illustrated  by 
the  new  steamers  put  into  service  between  Xew  York 
and  San  Francisco.  Some  of  these  steamers  can  carry 
10,000  tons  of  cargo  and  2,500  tons  of  coal.  They  have 
quadruple  expansion  engines,  with  a  boiler  pressure  of 
210  pounds  to  the  square  inch;  and  their  coal  consump- 
tion, when  running  at  nine  knots  an  hour,  is  only  40  tons 
a  day.  When  the  Panama  Canal  is  available  for  use 
these  vessels  will  consume  about  1,000  tons  of  coal  in 
transporting  10,000  tons  of  freight  the  5,000  miles  from 
'New  York  to  San  Francisco.  Tn  other  words,  it  will 
require  only  one  tenth  of  a  ton,  or  thirty  cents'  worth 
of  coal,  to  carry  a  ton  of  cargo  5,0<H)  miles. 

Until  within  a  few  years  it  was  thought  that  the  sail- 
ing vessel  would  always  be  used  exclusively  for  certain 
classes  of  bulky  goods  carried  over  long  routes;  such  as 
traffic  in  nitrate  of  soda  from  (Tiile  to  Europe,  grain  and 
lumber  from  the  Pacific  coast  of  the  T^'nited  States  to 
Europe,  and  the  trade  between  our   Atlantic  coast   and 


THE  SAILING  VESSEL  25 

Australia;  but  even  in  the  trade  over  these  routes  the 
steamer  is  competing  successfully  with  the  sailing  vessel. 
When  the  Panama  Canal  is  opened  the  steamer  will  still 
further  narrow  the  sphere  of  the  sailing  vessel. 

The  sailing  vessel  will  doubtless  be  used  for  some  time 
to  come,  esi^ecially  by  the  people  of  the  United  States, 
but  the  sailing  vessel  will  probably  be  employed  mainly 
for  two  classes  of  service.  One  of  these  fields  of  useful- 
ness will  be  that  part  of  our  coasting  trade  that  cannot 
readily  be  so  organized  as  to  be  performed  by  regular 
lines  of  steamers.  The  other  use  to  which  we  shall  con- 
tinue to  put  the  sailing  vessel  will  be  that  of  performing 
tlio  irregular  or  skirmish  work  of  international  trade — 
such,  for  instance,  as  that  now  carried  on  between  the 
Gulf  ports  of  the  United  States  and  the  river  Plata.  In 
the  earlier  development  of  such  a  traffic  the  sailing  vessel 
is  a  convenient  agent;  but  when  the  trade  becomes  larger, 
and  the  exchange  of  commodities  between  the  two  sec- 
tions becomes  regular  and  continuous,  a  line  of  steamers 
will  be  established,  and  most  of  the  sailing  vessels  will 
be  withdrawn  from  that  service. 

REFERENCES  FOR  FURTHER  READING 

Marvin,  W.  L.     "The   American  INIerohaiit  INIarine:     Its  History 

and  Romance  from  1620  to  1902."     1902. 
Hall,  Henry.     "  American  Navigation."     1S80. 
Hall,  Henry.     "Census  of  1880.     Part  VHI,  Miscellaneous." 

(The  last  265  pages  oi  this  valuable  report  give  an  account 

of  the  shipbuilding  in(histry  in  the  United  States,  and  contain 

much  information  regarding  the  evohition  of  the  sailing  vessel 

and  the  development  of  the  hull.) 
Abbott,  W.  J.     "  American  Merchant  Ships  and  Sailors."    1902. 

(A  volume  written  in  a  popular  style.) 
JoHNSOxN,  K.  H.     "  Report  of  the  Isthmian  Canal  Conmiission,  1899- 

1901."     Appendix  NN.     Cliapter  IX.     "(Concerning  the  Use 

of  an  Isthmian  Canal  by  Sailing  Vessels.". 


CHAPTER    III 

THE     HISTORY     OF     THE      OdEAN      CARRIER THE      STEAMSHIP 

The  steamship  has  had  a  briefer  but  more  compli- 
eated  technical  evohition  than  the  sailing  vessel.  The 
main  ])hases  of  the  development  of  the  present-day  steel 
steamer  may  be  snnunarized  by  a  Itricf  (k'scri|)ti()n  (1) 
of  the  application  of  the  power  of  jirojinlsion,  lirst  by 
paddle  wheels,  then  l)y  the  screw;  (2)  of  the  evolution  of 
the  marine  engine  by  which  the  power  is  generated;  and 
(3)  of  the  change  from  wooden  to  iron  and  to  steel  hulls, 
and  of  the  equipment  of  ships  with  appliances  to  add  to 
the  safety  and  comforts  of  travel. 

The  practicability  of  using  steam  power  to  propel 
ships  was  demonstrated  by  Robert  Fulton  in  1807,  when 
he  ran  the  Clermont  from  Xew  Yorh  City  to  Albany. 
The  use  of  steamboats  on  rivers  and  bays  became  gen- 
eral during  the  succeeding  ten  years,  but  it  was  thirty 
years  after  the  Clermont's  first  trip  before  it  was  demon- 
strated that  the  steamship  could  be  used  with  commercial 
success  in  the  transoceanic  service.  As  early  as  1819  a 
sailing  packet  of  380  tons,  the  Savannah,  was  equipped 
with  a  ninety  horse-power  horizontal  engine  and  with 
])addle  wheels.  This  slii]i  crossed  the  Atlantic  from  Sa- 
vannah to  Liv(n"].)ool  in  twenty-live  days,  dui'ing  eighteen 
of  wliich  she  used  steam  ]iower;  but  the  next  year  the 
engine  was  taken  out  of  tlie  ship.  The  first  vessel  to 
cross  the  ocean  all  the  way  under  steam  was  the  Royal 
26 


THE  STEAMSHIP  27 

William.,  which   made   the   trip  from   Quebec   via  Nova 
Scotia  and  the  Isle  of  Wight  to  London  in  1833. 

The  first  steamship  built  for  the  transatlantic  service 
was  the  Great  Western,  constructed  for  the  Great  West- 
ern Railway  interests,  and  launched  at  Bristol,  England, 
in  1837.  Her  first  trip  was  made  from  Bristol  to  New 
York,  April  8  to  21,  1838.  The  same  year  three  other 
British  steamers — the  Royal  William  (No.  2),  the  Sii'ius, 
and  the  Liverpool — made  trips  across  the  Atlantic  under 
the  management  of  the  Transatlantic  Steamship  Com- 
pany, of  Liverpool,  and  the  success  of  these  runs  led  to 
the  establishment  of  a  regular  service.  The  following 
year  the  great  Cunard  Company  was  organized  as  the 
third  British  transatlantic  steamship  company.  It  put 
three  steamships  in  operation  in  1840,  and  its  able  man- 
agement, aided  by  the  Government's  strong  support,  soon 
gave  it  the  leadership  of  all  the  British  companies,  a  rank 
which  it  still  holds  upon  the  Atlantic. 

The  early  steamers  were  wooden  vessels  propelled  by 
paddle  wheels.  The  gross  tonnage  of  the  Liverpool  was 
1,150,  of  the  Great  Western,  1,340  tons,  and  the  average 
tonnage  of  the  first  four  Cunard  steamers  (launched  in 
1840)  was  1,139  tons  each.  The  ships  were  a  little  over 
200  feet  long,  and  were  of  about  35  feet  beam.  They  had 
an  average  speed  of  8  to  10  knots  an  hour,  and  under 
favorable  conditions  took  about  two  weeks  to  make  the 
passage  from  port  to  port.  Frequently  three  weeks  were 
re(piired  for  tlie  trip  westward.  The  engines  were  all 
of  the  side-lever  type  described  below ;  those  of  the  Liver- 
pool  had  an  indicated  horse  power  of  408,  those  of  the 
Great  Western  750  horse  power,  and  the  Cunarders  740. 
A  comparison  of  these  figures  with  the  (hita  given  hiter  of 
the  measurement,  speed,  and  engine  power  of  the  hirge 
liners  of  the  present  day,  will  show  clearly  what  progress 
has  taken  place  in  marine  architecture. 
4 


28       OCEAN   AND   INLAND  WATER  TRANSPORTATION 

The  general  substitution  of  the  screw  propeller  in 
place  of  paddle  wheels  came  later  than  might  have  been 
expected.  In  1836,  John  Ericsson,  who  subsequently 
achieved  great  fame  and  revolutionized  naval  architecture 
by  building  the  Monitor,  and  Francis  P.  Smith,  an  Eng- 
lish farmer  working  independently,  each  successfully  ap- 
]died  tlio  screw  to  the  proj)ulsion  of  ships;  and  in  1S.30, 
Smith's  little  ship,  the  Arcliimedes,  of  237  tons  burden 
and  80  horse  power,  made  a  most  favorable  impression, 
and  led  to  the  adoption  of  the  screw  on  several  small 
naval  vessels,  and  on  the  large  iron  merchant  ship  the 
Great  Britain,  then  building.  jSTaval  architects  wel- 
comed the  sci*ew  because  it  was  placed  below  the  water 
line,  and  was  not  exposed  to  the  fire  of  the  enemy,  as 
were  the  huge  paddle  wheels. 

Most  builders  of  merchant  vessels  continued  to  prefer 
paddle  wheels  until  after  1850.  Before  that  date  the 
side-wheel  steamers  made  better  speed  than  the  screw 
steamers  did.  This  was  due  partly  to  the  designs  of  the 
early  screws,  and  also  to  the  fact  that  the  marine  engines 
had  been  designed  with  reference  to  driving  paddle 
wheels.  The  screw  propeller  necessitated  a  differently 
constructed  engine,  which  builders  required  some  time 
to  design  and  supply.  The  Great  Britain,  the  first  large 
transatlantic  ship  to  use  the  screw,  began  running  in 
1844.  jSTumerous  small  steamers  both  in  the  United 
States  and  Europe  were  constructed  with  screw  propellers 
before  1850;  but  it  was  after  that  date  before  the  man- 
agers of  the  large  ocean  lines  became  convinced  that  the 
screw  was  preferable  to  the  paddle  wheels.  The  famous 
Collins  Line,  in  the  United  States,  ordered  four  large  ex- 
pensive mail  steamers  in  1848,  and  put  them  into  service 
in  1850,  but  they  were  of  wooden  construction  and  had 
paddle  wheels.  The  Inman  Line,  of  Liverpool,  founded 
in   1850,   began   operating  screw  steamers   of  iron   con- 


THE  STEAMSHIP  29 

striiction  at  the  close  of  that  year,  and  the  Allan  Line 
began  running  ships  of  like  character  in  1854.  The  con- 
servative Cimard  Company  pnt  the  first  screw  steamer, 
the  Persia,  into  the  Atlantic  service  in  1862,  during 
which  year  the  company  built  their  last  paddle  wheel 
ocean  liner.  The  famous  Great  Eastern,  completed  in 
1859,  Avas  provided  with  paddle  wheels  and  a  screw  and 
six  masts. 

It  was  twenty-three  years  after  the  construction  of 
the  Archimedes  before  the  paddle  wheels  were  finally 
al)andoned  in  favor  of  the  screw  by  the  builders  of  ocean 
liners.  American  companies  were  slower  in  adopting  the 
screw  propeller  than  the  British  companies.  This,  doubt- 
less, was  due  in  part  to  our  adherence  to  wooden  hulls 
until  after  the  British  builders  had  adopted  iron  con- 
struction. 

The  use  of  twin  screws  instead  of  a  smgle  propeller 
dates  from  about  1880,  and  naturally  began  with  war 
vessels.  The  merchant  vessels  in  use  before  1880  were 
not  large  enough  to  warrant  the  installation  of  two  sets 
of  engines.  The  war  ships,  being  built  with  reference 
to  speed,  safety,  and  certainty  of  control,  found  the  twin 
screw  of  special  advantage.  The  first  twin  screw  mer- 
chant vessel  in  the  transatlantic  trade,  the  Notting  Hill, 
began  running  in  1881.  The  City  of  New  York,  placed 
in  service  in  1888  by  the  Inman  Line,  was  the  first  of  the 
large  ocean  liners  to  use  twin  screws;  but  since  that  date 
all  large  passenger  steamers  have  had  two  propellers. 

The  use  of  more  than  two  propellers  is  rendered  un- 
desirable by  the  fact  that  not  even  the  largest  passenger 
steamers  have  found  it  pi'ofitable  to  carry  more  than  two 
sets  of  engines.  The  gain  in  speed  and  power  resulting 
from  the  third  set  of  engines  does  not  compensate  for 
the  extra  expense  of  installation  and  maintenance  and 
for  the  space  occupied.     The  substitution  of  the  compact 


?,()       ()CI:AN   AM)   l.NLA.M)   WATIOK   TRANSPORTATION      - 

1iirl)iiie  t'liginos  for  tlif  reciprocating  engines  now  in  use, 
wliicli  seems  probable,  will  be  accoiii])anie(l  by  the  use  of 
tlircc  or  more  screws. 

The  most  important  ])hase  of  the  technical  history  of 
occjin  transportation  is  tlic  evolution  of  the  marine  en- 
uiiic.  The  ])ower  lliat  e;in  ])e  economically  genei'ated 
within  tlie  sliip  limits  the  size  and  the  speed  of  ocean  car- 
riers. The  Great  Kaslcni  jn-ovcd  a  failure  forty-tive 
years  ago,  for  various  reasons,  but  mainly  because  her 
engines  were  unable  to  supply  the  power  needed.     To- 


'*=^^' 


\^ 


h 

> 


Side  Lever  Type  of  Marine  Engine. 


day  vessels  as  large  as  the  Great  Eastern   are  profitably 
run  at  double  the  speed  that  steamer  could  maintain. 

In  adapting  the  steam  engine  to  the  work  of  propel- 
ling ships,  numerous  types  of  engines  were  constructed, 


THE  STEAMSHIP 


31 


but  only  the  more  im})ortaiit  ones  need  be  considered 
in  this  chapter.  The  engine  most  used  for  driving  paddle 
M'heels  was  the  side-lever  type,  shown  in  the  illustration. 
The  cylinder  was  placed  upright,  and  the  lever  or  beam 
connecting  the  ])ist()n    vod   with  the  rod   attached   to   the 


The  Oscillating  Geared  Engine. 


crank  shaft  of  the  paddle  wheels  was  placed  at  the  side 
of  the  cylinder.  The  overhead  beam  engine  so  frequently 
seen  on  side-wheel  ferry  boats  and  river  and  sound  steam- 
ers was  not  employed  on  ocean  vessels,  because  it  tended 
to  make  the  ship  top-heavy. 

The  side-lever  engines  constructed  at  the  beginning, 
about  1840,  had  cylinders  60  to  72  inches  in  diameter,  a 
piston  speed  of  170  to  190  feet  per  minute,  and  were  sup- 
plied with  steam  from  boilers  carrying  pressures  of  only 
10  or  12  pounds  per  square  inch.  The  indicated  horse 
power  was  from  400  to  750,  and  the  speed  was  from  7 
to  9  knots  per  hour.  The  first  engines  had  surface  con- 
densers, as  engines  now  do,  but  from  1840  until  1860  the 
jet  condensers  were  preferred,  although  they  had  the  dis- 
advantage of  introducing  salt  water  into  the  boilers. 
"With  boiler  pressures   of  more  than   35   pounds  the  jet 


;32       OCF.AN   AND   IXI.ANI)   WATEIi  TllAxNSPOllTATION 

coiideiisor  cannot  Ix'  used,  hocause  tlio  heat  of  the  steam 
causes  the  boiler  to  become  coated  with  sulphate  of  lime. 

The  last  large  ocean  vessel  to  be  fitted  with  side- 
levcr  engines  was  the  Scotia,  in  1862,  of  the  Cunard 
Line,  whieli  liad  boilers  carrying  a  pressure  of  25  pounds 
per  square  inch.  The  huge  cylinders  were  8  feet  4^ 
inches  in  diameter,  had  a  piston  stroke  of  12  feet,  a  piston 
speed  of  360  feet  per  minute,  an  indicated  horse  power 
of  4,000,  and  gave  a  vessel  speed  of  13^  knots  per  hour. 

During  the  period  of  transition  from  side  wheels  to 
the  screw  propeller,  engines  with  oscillating  cylinders 
were  installed  in  numerous  ships.  The  piston  of  the  cyl- 
inder was  attached  directly  to  the  crank  shaft,  without  a 
lever  or  connecting  rod.  Engines  of  this  type  were  used 
on  the  Adriatic,  of  the  Collins  Line,  on  the  famous  Great 
EaKtern,  both  in  1858,  and  on  other  vessels.  The  os- 
cillating engines  were  successfully  applied  to  driving 
paddle  wheels  and  screw  propellers,  but,  when  used  to 
drive  a  screw,  gearing  was  necessary  to  secure  the  re- 
quisite speed  for  the  propeller  shaft,  which  needed  to 
revolve  from  three  to  six  times  as  fast  as  paddle  wheels. 

The  engines  constructed  for  screw  steamers  were  of 
two  general  types,  geared  and  direct-acting.  Between 
1850  and  1860  the  geared  engine  was  more  frequently 
used,  mainly  because  the  boilers  as  then  constructed  had 
such  a  low  pressure  that  the  piston  speed  could  not  be 
made  high  enough  to  drive  the  screw  as  rapidly  as  was 
required  without  gearing.  The  geared  engine  was  made 
in  various  designs.  The  arrangement  of  a  "  beam " 
engine  of  1855  is  indicated  in  the  illustration. 

The  marine  engine  now  universally  used  is  the  in- 
verted direct-acting,  in  which  the  cylinders  are  placed 
inverted  above  the  screw  shaft,  with  the  cranks  of  which 
the  connecting  rods  from  the  pistons  are  directly  at- 
tached.    The  first  Atlantic  steamer  to  have  an  engine  of 


THE   STEAMSHIP 


33 


this  type  was  the  Canadian,  of  the  AHan  Line,  in  1854. 
After  this  date  the  direct-acting  engine  was  gradually 
adopted,  but  it  was  given  several  other  designs  than  the 
inverted.  Many  steamers  placed  the  cylinders  horizon- 
tally at  right  angles  to,  and  on  a  level  with,  the  propeller 
shaft.  These  Avere  called  truid<  engines,  because  the  pis- 
ton was  large   and   hollow   and   had   the   connecting  rod 


ty-rrrj-zD 


Geared  Beam  Engine,  Constructed  in  1855. 


attached  to  the  center  of  the  hollow  trunk.  In  another 
arrangement  the  cylinders  were  placed  upright,  the  piston 
acted  upward  and  was  attached  by  a  long  return  connect- 
ing rod  with  the  shaft  placed  either  above  or  below  the 
cylinders.  Another  device  was  llie  inverted  diagonal  ar- 
rangement of  cylinders.  A  popular  engine  was  one  com- 
bining both  horizontal  trunk  and  inverted  engines  acting 
upon  the  same  shaft.  It  was  not  until  after  1870  that 
the  inverted  direct-acting  engine  came  to  be  exclusively 
used,  and  it  then  supplanted  the  other  designs,  because 
it  was  the  best  arrangement  for  the  cylinders  of  the  com- 
pound engine. 


34        OCEAN    AND    INLAND    WA'lEIl  TRANSPORTATION 

Tlic  (•(»nij)ouii(l  engine  -was  successfully  used  in  1854 
on  the  Pacific  steamship  Brandon,  whose  boilers  carried  a 
])ros.snro  of  42  pounds.  However,  the  compound  engine 
did  not  ninkc  ninch  licadway  until  1^70,  hy  which  time  a 
itoih-r  pi-cssnrc  of  oO  pounds  to  the  s([uar('  inch  was  not 
(•onsich'red  extraordinary.  The  steamship  Holland,  1870, 
was  the  first  vessel  to  adopt  a  compound  engine  for  the 
transatlantic  trade.     Its  boiler  pressure  was  60  pounds. 

In  the  arrangement  of  the  cylinders  and  cranks  of 
the  compound  engine  various  designs  were  followed;  but 
with  the  exception  of  the  gradual  improvements  in  boiler 
construction  whereby  the  steam  pressure  was  raised  to 
90  and  100  pounds,  there  was  no  change  that  requires 
notice  here  made  in  the  marine  engine  before  1881,  when 
the  triple-expansion  engine  made  its  appearance  in  the 
Australian  liner  Aberdeen.  In  1884-,  the  Wilson  Line 
steamer,  the  MarteUo,  inaugurated  the  use  of  the  triple- 


The  Truxk  Engine. 


expansion  engine  in  the  Atlantic  service.     Other  vessels 
with  similar  engines  soon  followed. 

The    quadruple-expansion    engine    dates    from  1894:, 
when  the  American  Line  ships,  the  St.  Louis  and  the  St. 


THE  STEAMSHIP 


35 


Paul,  were  put  into  service.  The  efficiency  and  economy 
obtained  from  quadruple  expansion  are  somewhat  greater 
than  can  be  secured  from  triple  expansion,  but  the  adop- 


The  Quadruple-Expansiox  Inverted  Direct-Acting  Marine 

Engine. 


tion  of  quadruple   engines  does  not  mark  an   especially 
important  step  forward. 

Several  references  have  already  been  made  to  the 
boilers  of  marine  engines,  and  to  the  limitations  which 
the  low  pressure  of  the  early  boilers  placed  upon  the  im- 
provement of  the  engine.      The  power  is  applied  in   the 


36       OCEAN   AND  INLAND    WATER  TRANSPORTATION 

cyliiKlcr,  hut  ;is  the  powor  is  generated  in  the  boilers, 
they  (k'tei-iniiie  the  junounfc  of  available  energy.  In  the 
flat-si(l('<l,  b(»x-slia))e<l  boilers  used  before  the  introduction 
of  the  ('yliudrical  boik'r  with  interiuil  furnaces  in  1808, 
h-igh  pressure  was  inijxissildc.  Accoi'diuuiy,  from  1840 
to  1800  most  marine  engines  wc^re  designed  with  refer- 
ence to  a  steam  pressure  of  thirty  pounds  or  less  to  the 


The  Marine  Boiler. 
Showing  Arrangement  of  the  Furnaces  and  Fire  Tubes. 


scjuare  inch.  The  cylinders  were  of  large  diameter  and 
the  piston  speed  slow.  When  the  introduction  of  the 
screw  called  for  increased  piston  speed,  and  the  invention 
of  the  compound  engine  also  made  higher  steam  pressure 
necessary,  the  boiler  was  so  designed  as  to  carry  higher 
pressure  and  to  provide  greater  heating  surface. 

The  circular  boilers  used  from  1870  to  1880  permit- 
ted the  ]n-essure  to  be  raised  to  100  pounds  by  1880. 
When  tlie  introduction  of  triple-expansion  engines  caused 


THE  STEAMSHIP  37 

a  demand  for  higher  pressure,  the  corrugated  furnace 
now  used  was  adopted.  The  cylindrical  boiler,  with  three 
internal  corrugated  furnaces  and  with  return  horizontal 
tubes,  is  the  one  now  almost  universally  used  on  merchant 
steamers.  Steam  pressures  of  200  to  225  pounds  are 
customary.  On  naval  vessels  a  different  type  of  boiler, 
having  water  tubes  surrounded  by  fire,  has  been  used  to 
a  large  extent.  The  water-tube  boiler  is  more  efficient, 
but  is  more  expensive  to  construct  and  to  maintain;  and 
its  use  has  thus  far  been  confined  mainly  to  war  vessels, 
where  cost  is  a  minor  consideration. 

Without  giving  in  detail  the  numerous  minor  improve- 
ments by  which  the  marine  engine  has  been  brought  to 
its  present  state,  the  results  of  the  improvements  may  be 
shown  by  the  following  table,  taken  from  "  The  Atlantic 
Ferry,"  by  A.  J.  Maginnis,  which  shows  the  power  ob- 
tained from  the  combustion  of  one  pound  of  coal  in  the 
furnaces : 

TABLE  SHOWING  THE  EFFECTIVE  POWER  OBTAINED  BY 
MARINE  ENGINES  AT  DIFFERENT  DATES  FROM  THE 
COMBUSTION  OF  ONE  POUND  OF  COAL 

In  1840,  1  lb.  coal  propelled  .578  displaced  tons  at  8  knots,  of  which 
.057  was  earning  weight. 

In  1850,  1  lb.  coal  propelled  .6  displaced  tons  at  9  knots,  of  which 
.10  was  earning  weight. 

In  1860,  1  lb.  coal  propelled  .82  displaced  tons  at  10  knots,  of  which 
.27  was  earning  weight. 

In  1870,  1  lb.  coal  j)ropellod  l.S  displaced  tons  at  10  knots,  of  which 
.9  was  earning  weight. 

In  1880,  1  11).  coal  propelled  2.1  displaced  tons  at  10  knots,  of  which 
1.05  was  earning  weight. 

In  1890,  1  lb.  coal  propelled  3.33  displaced  tons  at  10  knots,  of  which 
1.93  was  earning  weight. 

In  1898,  1  lb.  coal  propelled  3.5  displaced  tons  at  10  knots,  of  which 
2.1  was  earning  weight. 

Seventy  years  of  development  have  brought  the  recip- 
rocating marine  engine  to  high   efficiency,  but  its  place 


.SS       OCEAN   AND   INLAND   WATER  TRANSPORTATION 

niiiy  ])().ssil)ly  be  taken  in  the  future  hj  a  radically  ditferent 
type  of  engine,  tlie  tiirl)ine.  The  successful  use  of  the 
turhiiK!  engine  for  driving  dynamos  and  pumps  Inis  led  to 
its  being  successfully  tried  on  ocean  vessels,  both  mer- 
chant and  naval  ships.  The  Cunard  Steamship  Company 
in  1905  equipped  the  huge  steamer  Carmania,  of  30,000 
tons  dis])lacenient,  with  tur])ine  engines  having  an  indi- 
cated horse  power  of  21,000.  The  two  Cunard  steamers 
now  building  are  to  be  the  largest  and  fastest  vessels  afloat, 
and  will  be  equipped  with  turbine  engines.  The  engines 
in  each  vessel  are  to  have  about  70,000  horse  power.  At 
the  close  of  1905  there  were  said  to  be  stationary  and 
marine  turbine  engines  in  operation  wath  an  aggregate 
horse  power  of  700,000. 

There  are  two  general  types  of  steam  turbines:  one, 
invented  in  1883  by  De  Laval,  in  Sweden,  and  another  in 
1884,  by  Parsons,  in  Sweden.  Since  their  invention  both 
kinds  of  turbines  have  undergone  steady  improvement,  and 
both  may  be  expected  to  be  given  greater  efficiency  as  the 
result  of  future  inventions.  The  description  of  the  steam 
turbine  engine  contained  in  the  Census  volume  published 
in  1902  (vol.  x.  Part  lY,  p.  397)  is  clear  and  concise,  and 
may  well  be  reproduced  here: 

"  In  both  the  De  Laval  and  Parsons  steam  turbines 
power  is  generated  by  the  impact  of  a  jet  of  steam  upon 
buckets  on  the  periphery  of  a  revolving  disk.  The  essen- 
tial differences  between  the  two  types  of  motors  are  these: 
The  De  Laval  turbine  has  a  single  disk,  with  several  steam 
jets  or  nozzles.  The  nozzle  has  a  divergent  aperture  in 
which  the  expansion  of  the  steam  takes  place.  The  single 
turbine  disk  revolves  at  a  high  rate  of  speed,  say  from 
10,000  to  30,000  revolutions  per  minute,  according  to  the 
size  of  the  motor,  this  speed  being  reduced  to  about  one 
tenth  on  the  main  shaft  by  means  of  accurately  cut  spiral 
gears.     The  Parsons  type  of  turbine,  on  the  other  hand, 


THE  STEAMSHir 


39 


lias  a  series  of  disks  mounted  upon  a  common  shaft,  and 
alternating  with  spiral  blades  fixed  within  the  casing  of  the 
shaft.  There  are  buckets,  or  cups,  upon  both  the  revolv- 
ing disks  and  the  fixed  blades,  the  fixed  buckets  being  re- 
versed in  relation  to  the  moving  cups.  The  steam,  ad- 
mitted first  through  a  set  of  stationary  blades  or  buckets, 
impinges  at  an  angle  upon  the  first  rotating  disk  and  im- 
)iarts  motion,  passing  thence  through  another  set  of  fixed 
blades  to  the  second  disk  upon  the  main  shaft,  and  thus 


A  Parsoxs  Turbine  Engine. 


through  the  entire  series  of  alternately  fixed  and  rotating 
buckets.  The  area  of  the  passages  increases  progressively 
to  correspond  with  the  expansion  of  the  steam  as  it  is  used 
on  the  successive  disks.  The  expansion  of  the  steam  is 
accomplished  in  the  turbine  itself,  instead  of  in  the  noz- 
zles, as  in  the  De  Laval  motor.  There  is  but  a  single 
shaft,  instead  of  the  two  in  the  De  Laval  type,  and  the 
buckets  in  a  given  size  of  Parsons  turbine  number  about 
30,000,  as  against  about  350  in  a  De  Laval  motor  of 
the  same  size." 

Whether  the  same  amount  of  power  can  be  secured 


10     ()Ci:an  amj  inland  water  transportation 

more  ('{'oiiuiiiically  I»y  means  of  the  turbine  than  by  means 
of  the  reciprocating  engine  is  apparently  not  fully  estab- 
lished, although  greater  economy  is  claimed  for  the 
turbine;  but  the  turbine  has  certain  advantages,  other 
I  hail  ])()\ver  efficiency,  that  are  valuable.  The  turbine  en- 
gine l)eing  much  more  compact  tlian  the  reciprocating,  occu- 
l)ies  less  space  and  weighs  less.  The  friction  of  its  mov- 
ing parts  is  less,  and  it  is  without  the  vibration  wliicli  the 
reciprocating  engine  has.  These  advantages  of  tlie  turbine 
give  it  special  merits  as  a  marine  engine,  in  which  econ- 
omy of  space  and  weight  and  reduction  of  vibration  to  a 
miuininm  arc  sjiocially  important  considerations. 

The  third  phase  of  the  technical  history  of  the  modern 
steamship  is  concerned  w'ith  the  hull.  The  lines  to  be 
followed  in  constructing  a  hull  to  secure  seaworthiness  and 
speed  w'ere  worked  out  by  the  builders  of  sailing  vessels 
during  the  first  half  of  the  nineteenth  century,  and  when 
the  construction  of  steamships  began,  about  1840,  there 
were  no  important  changes  necessarv  in  the  design  of  the 
hull. 

The  first  steamships  had  wooden  hulls;  and,  as  was 
true  of  the  substitution  of  the  screw  for  the  paddle  wheel, 
the  change  from  wooden  to  iron  vessels  was  brought  about 
slowdy.  The  first  ocean-going  iron  vessel  was  the  Rain- 
how,  a  little  paddle-wheel  ship  of  580  tons  and  180  horse 
power,  built  at  Liverpool  in  1837-38.  The  vessel  that  did 
most  to  bring  the  iron  hull  into  favor  was  the  Great 
Britain,  a  ship  phenomenally  large  for  its  time,  of  3,270 
tons  gross,  built  in  1839-44.  The  hull  was  divided  into 
six  water-tight  compartments,  and  was  so  strongly  built 
that  it  lay  stranded  on  the  Irish  coast,  without  serious 
damage,  for  eleven  months  in  1846  and  1847.  The  vessel 
w'as  kept  in  service  on  various  routes  for  nearly  forty 
years, 


THE  STEAMSHIP  41 

Several  causes  delayed  the  general  adoption  of  iron 
hulls.  Until  1860  the  people  of  the  United  States  led 
Great  Britain  and  other  countries  in  the  tonnage  of  ship- 
ping annually  constructed,  and  as  wood  was  abundant  and 
iron  was  expensive  in  the  United  States,  our  builders  ad- 
hered to  wooden  construction  much  longer  than  other 
countries  did.  The  British  Government,  always  conserva- 
tive, did  not  favor  iron  hulls  for  its  navy  until  after  1850. 
Until  1S52  the  British  mails  could  be  carried  only  in 
wooden  ships.  Some  of  the  large  English  steamship  com- 
panies preferred  wooden  ships  as  late  as  18G0.  The  Cu- 
nard  Company  built  its  first  iron  ship  for  the  Atlantic 
service  in  1856. 

The  construction  of  iron  ships  made  steady  though  not 
rapid  headway  in  Great  Britain  during  the  decade  of 
1850-60.  Thirty  per  cent  of  the  British  tonnage  was 
iron  in  1860,  and  after  that  date  there  was  but  a  small 
wooden  tonnage  launched.  At  the  present  time  over 
ninety-nine  per  cent  of  the  tonnage  of  the  shipping  of  the 
United  Kingdom  is  of  iron  or  steel  construction.  In  the 
United  States,  on  the  contrary,  the  construction  of  iron 
ships  made  but  little  headway  until  after  1870,  and  since 
then  the  change  from  wood  to  iron  has  been  so  slow  that, 
in  1904,  fifty-eight  per  cent  of  the  tonnage  under  the 
American  flag  was  of  wooden  vessels.  It  can,  however, 
only  be  a  question  of  time  when  wood  must  give  way  to 
metal  in  shipbuilding,  because  of  the  unquestionable  supe- 
riority of  iron  and  steel  ships. 

The  first  change  in  the  material  used  in  the  construc- 
tion of  hulls  was  from  wood  to  iron;  the  second,  was  from 
iron  to  steel.  British  builders  began  to  use  steel  shortly 
before  1880;  and  in  1SS6  the  tonnage  of  steel  ships  con- 
structed exceeded  the  figures  for  iron.  Since  1886  the 
total  tonnage  and  annual  construction  of  iron  ships  in  the 
United  Kingdom  has  steadily  declined;  while  the  figures 


42       OCEAN   AND   INLAND   WATER  TRANSPORTATION 

for  steel  vessels  have  risen,  until  ut  the  ])resent  time  over 
four  fifths  of  the  total  shipj)ing  of  that  eountry  consists 
of  steel  vessels.  Steel  has  now  almost  displaced  iron  in  the 
construction  of  liulls  in  the  shipyards  of  all  countries,  and 
as  existing  iron  shijjs  wear  out,  their  places  are  taken  by 
steel  vessels. 

The  hull  of  the  modern  steamer  is  divided  by  bulk- 
lieads  into  water-tight  compartments,  and  is  constructed 
with  a  double  bottom  within  which  water  ballast  may  be 
carried.  The  ship  carries  dynamos,  machinery  for  making 
ice,  for  handling  cargo,  for  steering  the  vessel,  and  for 
many  other  purposes.  Almost  every  year  sees  some  new 
('(|ui]jment  added  to  the  fitting  of  the  already  highly  com- 
])1('\  and  efKcient  ocean  carrier. 

The  technical  progress  made  in  the  construction  of 
ocean  vessels  can  be  stated  most  satisfactorily  by  a  brief 
description  of  the  Minnesota,  constructed  at  iS^ew  London, 
Conn.,  and  completed  in  190.5.  This,  and  its  sister  ship 
the  Dakota,  were  built  for  the  Great  Northern  Steamship 
(Company  to  carry  freight  and  passengers  between  Puget 
Sound  ports  and  transpacific  countries.  They  are  the 
largest  ships  ever  built  in  America.  Their  gross  tonnage 
is  20,718,  and  their  net  13,324  tons,  and,  with  the  excep- 
tion of  a  few  vessels  on  the  North  Atlantic,  were  the  largest 
vessels  afloat  in  1 905.  These  vessels  are  630  feet  in  length 
over  all,  73  feet  6  inches  beam,  and  56  feet  in  depth  from 
the  keel  to  the  upper  deck  amidships.  Although  intended 
mainly  for  the  transportation  of  freight,  each  vessel  has 
accommodations  for  250  cabin,  68  second-class,  and  1,500 
steerage  passengers.  The  hull  is  constructed  with  32 
water-tight  com])artments,  and  there  are  nine  decks.  These 
vessels  have  a  speed  of  about  fifteen  knots  an  hour. 

The  Cunard  Steamsliip  Company,  of  Liverpool,  is  con- 
structing two  vessels  intended  to  exceed  in  size  and  speed 
any  others  that  they  have  thus  far  built.     These  vessels. 


THE  STEAMSHIP  43 

which  will  be  completed  in  1907,  are  to  be  nearly  800  feet 
in  length,  and  are  to  be  proj^elled  by  four  screws  operated 
with  turbine  engines  having  70,000  horse  power.  They 
are  to  have  a  speed  of  25  knots  per  hour,  and  are  to  be  able 
to  maintain  an  average  speed  of  24^  knots  per  hour  for  the 
transatlantic  voyage. 

REFERENCES  FOR  FURTHER  READING 

Maginnis,  a.  J.     "The  Atlantic  Ferry."     Third  Edition,  1900. 

Seaton,  A.  E.  "  A  Manual  of  ]\Iarine  Engineering."  Twelfth 
Edition,  1895. 

Fry,  Henry.  "  The  History  of  North  Atlantic  Steam  Navigation." 
1896. 

Preble,  G.  H.  "  A  Chronological  History  of  the  Origin  and  Devel- 
opment of  Steam  Navigation,  1543-1882."     1883. 

Marvin,  W.  L.     "The  American  Merchant  Marine."     1902. 

Chamberlain,  E.  T.  "  Annual  Reports,  Commissioner  of  Naviga- 
tion, Washington,  D.  C." 

Smith,  A.  R.  "Shipbuilding."  Twelfth  Census  of  the  United 
States,  vol.  x.  Part  IV,  i)p.  209-39.     1902. 

Crowell,  J.  F.  "  The  Shipping  Industry  of  the  United  States,  and 
Its  Relation  to  the  Foreign  Trade."  Monthly  Summary 
of  Commerce  and  Finance,  for  December,  1900.  Bureau  of 
Statistics,  Washington,  D.  C. 


CHAPTER    IV 

WAYS    AND    TERMINALS    OF    OCEAN    TRANSPORTATION 

The  oceans  provide  the  great  highways  of  international 
trade,  which,  from  port  entrance  to  port  entrance,  are  free 
and  open  to  all  who  observe  the  international  rules  of  the 
I'oad  at  sea.  Although  ocean  traffic  follows  certain  rather 
definite  routes,  no  nation,  and  of  course  no  company,  can 
convert  any  route  into  an  exclusive  right  of  way  such  as  a 
railroad  corporation  possesses.  A  few  short  sections  of 
some  frequented  routes  of  ocean  traffic — the  Suez,  Corinth 
and  Kiel  canals — are  artificial,  and  subject  to  tolls,  but 
their  use  is  open  to  all  upon  equal  terms.  This  simple  but 
fundamental  fact,  that  the  sea  is  an  open  highway,  causes 
ocean  transportation  to  be  governed  by  laws  different  from 
those  controlling  the  railway  service;  and  the  main  prob- 
lems of  transportation  economics — competition,  rates  and 
fares,  and  government  regulation — are  radically  affected 
by  this  diff(M-ence  between  the  railway  and  the  ocean  high- 
way. 

'i'lic  route  connecting  the  shipjiers  of  one  poi-t  with 
those  of  anotlioi'  ])ort  contains  two  i)ai'ts,  the  ocean  section 
or  the  main  lin(\  and  the  harbors  and  ai)])roaching  chan- 
nels, corresponding  to  the  railway  terminals  and  yards. 
These  two  parts  of  the  ocean  route  will  be  considered  sep- 
arately. 

The  routes  followed  by  ocean  ships  are  determined 
niaiidy  by  the  location  of  the  areas  between  which  trade 
44 


WAYS  AND  TERMINALS  OF  OCEAN  TRANSPORTATION   45 

is  being  carried  on,  by  the  sphericity  of  the  earth,  and  by 
the  size  of  the  land  masses  lying  between  the  trading 
areas.  The  routes  followed  by  sailing  vessels  are  deter- 
mined also  by  the  location  and  direction  of  ocean  currents 
and  prevailing  winds.  Among  the  minor  causes  influenc- 
ing the  routes  of  both  steamers  and  sailing  vessels  may  be 
mentioned  the  absence  or  prevalence  in  certain  areas  of  the 
sea  of  floating  ice,  or  of  severe  storms  at  different  seasons 
of  the  year.  The  reader  will  have  little  difficulty  in  giving 
several  illustrations  for  each  of  these  causes. 

On  account  of  the  spherical  shape  of  the  earth,  the 
shortest  distance  between  any  two  places  on  the  earth's 
surface  is  the  arc  of  a  great  circle  connecting  the  two 
points.  This  fact  influences  nearly  all  ocean  routes,  and 
particularly  those  across  the  North  Atlantic  and  the  North 
Pacific.  For  instance,  Yokohama  and  San  Francisco  are 
in  practically  the  same  latitude — i.  e.,  Yokohama  lies  di- 
rectly west  of  San  Francisco;  but  the  short  route  between 
the  places,  being  the  arc  of  a  great  circle,  curves  north- 
ward nearly  to  the  Aleutian  Islands. 

The  steamer  can  usually  take  the  short  route,  but  the 
sailing  vessel  must  shape  its  course  with  reference  to  the 
currents  and  prevailing  "winds,  although  by  so  doing  the 
distance  may  be  greatly  increased.  In  sailing  from  New 
York  to  Rio  Janeiro,  for  example,  a  vessel  will  steer  east- 
ward wdth  the  winds  and  currents  to  the  vicinity  of  the 
Azores,  or  nearly  across  the  Atlantic,  where,  a  longitude 
east  of  Cape  St.  Roque  having  been  reached,  the  ship  will 
turn  toward  the  south,  and,  with  the  aid  of  the  northeast 
trade  winds  north  of  the  equator  and  of  the  southeast 
trades  of  southern  latitude,  will  readily  make  the  port  of 
Rio  Janeiro. 

Ocean  routes  are  many  in  number  and  of  different  de- 
grees of  importance;  there  being,  as  in  the  case  of  rail- 
roads, trunk  lines  and  auxiliary  routes,  main  lines  and 


•  l(i        OCJ^AN    AND  INLAND    WATER  TRANSPORTATION 

feeders.      'IMic  loUowiiig'  arc  the  most  important  trunk  line 
routes; 

1.  The  ocean  trunk  line  having  the  heaviest  freight 
and  passenger  traffic  is  the  one  connecting  the  northeast- 
ern seaports  of  the  United  States  witli  tlic  entrance  to  the 
British  ChanneL  Upon  this  Xorth  Atlantic  trunk  route 
more  than  one  sixth  of  the  world's  entire  shipping  is  em- 
ployed. In  order  to  conform  as  closely  as  possible  to  a 
great  cinde,  this  route  skirts  the  coast  of  North  America 
northward  to  the  Banks  of  Newfoundland,  and  then  curves 
across  the  Atlantic.  The  branch  lines  which  unite  in  this 
North  Atlantic  tnmk  route  reach  American  ports  from 
Canada  to  the  Caribbean,  and  European  ports  from  the 
Baltic  to  the  Mediterranean.  Vessels  plying  between 
Europe  and  (Julf  and  West  Indian  ports  take  a  course  but 
slightly  south  of  this  route,  and  pass  comparatively  close 
to  the  coast  of  the  United  States.  The  route  from  Great 
Britain  to  the  Panama  Canal  via  New  York  is  only  323 
miles  longer  than  the  most  direct  course. 

2.  The  ocean  trunk  line  ranking  next  to  the  one  across 
the  North  Atlantic  is  the  route  from  the  Eastern  United 
States  and  Western  and  Southern  Europe  via  the  Mediter- 
ranean and  the  Suez  Canal  to  India,  the  East  Indies,  China, 
and  Japan.  Before  the  Suez  Canal  was  opened,  in  1869, 
the  ocean  commerce  of  Euroj^e  and  the  United  States  with 
Eastern  countries  was  carried  in  sailing  vessels  around  the 
Cape  of  Good  Hope,  and  was  small  in  comparison  with  the 
great  volume  of  traffic  now  passing  through  the  Suez  Ca- 
nal. As  sailing  vessels  cannot  navigate  the  Red  Sea,  only 
steamers  use  the  Suez  Canal  route.  This  ocean  trunk  line 
has  an  especially  large  number  of  branch  lines  or  feeders 
both  east  and  west  of  the  Canal.  From  the  United  States, 
from  the  British  Channel,  and  from  Mediterranean  ports 
in  the  West,  and  from  British  India  and  Burmah,  the 
Dutch  East  Indies,  Eastern  Australia,  French  Indo-China, 


WAYS  AND  TERMINALS  OF  OCEAN  TRANSPORTATION      47 

the  Philippines,  China  and  Japan  in  the  East,  routes  con- 
nect with  the  main  line  and  help  to  swell  the  volume  of 
traffic. 

3.  A  third  ocean  trunk  line  is  the  South  African,  Its 
Atlantic  termini  are  in  Europe  and  America;  its  main 
eastern  connections  are  with  the  east  coast  of  Africa  from 
Delagoa  Bay  southward,  with  Australia  and  New  Zealand, 
and,  for  sailing  vessels,  with  the  East  Indies  and  the  Orient. 
Some  ships  on  this  route  from  Europe  engage  in  the  West 
African  coasting  trade,  but  more  do  not.  A  large  share, 
l)nt  not  all  shipping  on  this  line,  calls  at  Cape  Town,  the 
most  im])()rtant  center  of  the  South  African  trade.  The 
heaviest  traffic  over  this  Sonth  African  route  is  carried 
by  the  numerous  lines  of  freight  steamers  running  from 
-Northwestern  Europe  to  Australasia.  Passenger  and  mail 
steamers  take  the  Suez  route  from  the  British  Channel  to 
Australia;  l)nt  tlie  distance  saved,  being  less  than  1,000 
miles,  is  not  enough  to  cause  freighters  to  al)andon  the 
Cajie  route. 

4.  Corresponding  with  the  route  just  described  is  the 
trunk  line  around  South  America,  connecting  the  eastern 
and  western  shores  of  the  North  Atlantic  with  the  Pacific 
coast  of  the  Americas.  In  addition  to  the  through  traffic 
carried  between  the  Atlantic  and  Pacific  regions  over  this 
route,  there  are  carried  on,  usually  distinct  from  the 
through  traffic,  the  Pacific  coastwise  trade,  and  the  trade 
of  Europe  and  the  Eastern  United  States  with  Brazil  and 
the  countries  of  the  Ilio  de  la  Plata. 

Vessels  engaged  in  the  trade  between  the  countries  of 
the  JSTorth  Atlantic  and  the  east  coast  of  S<uith  America 
do  not  engage  in  the  througli  traffic  with  regions  beyond 
the  Straits  of  Magellan.  Several  lines  of  ships  ply  back 
and  forth  between  En  rope  and  Brazil  and  the  mouth  of  tlie 
Plata,  and  some  ship])ing  is  o]:)ei'ated  between  the  Ignited 
States  and  those  sections  of  South  America;  ])ut  a  large 


48       OCEAN   AND   INLAND   WATER  TRANSPORTATION 

share  <<('  oiir  iiii|H)rts  of  hides,  wool,  coffee,  and  ruhher  from 
eastern  South  America  is  brought  to  us  in  vessels  that  take 
cargoes  out  from  Europe  to  South  America,  and  load  there 
for  the  United  States,  where  cargo  for  Europe  is  readily 
obtained.  This  is  but  one  of  many  triangular  routes  fol- 
h)\v('(l  by  ocean  slii))])ing;  it  is,  however,  the  most  important 
one. 

When  the  Panama  Canal  is  completed,  most  of  the 
thidiigh  traffic  via  the  Straits  of  Magellan  will  be  diverted 
to  the  Isthmian  route.  Indeed,  the  main  reason  for  con- 
structing the  Panama  Canal  is  to  shorten  the  water  route 
between  the  countries  of  the  North  Atlantic  and  the  Pacific 
coast  of  the  three  Americas. 

5.  Although  the  traffic  of  the  Gulf  of  Mexico  and  the 
Caribbean  Sea — the  two  bodies  of  water  which  together 
are  often  called  the  American  Mediterranean — may  be 
said  to  be  handled  over  routes  that  are  southern  branches 
and  extensions  of  the  liorth  Atlantic  trunk  line,  the  pres- 
ent and  prospective  importance  of  the  trade  of  the  coun- 
tries along  the  Caribbean  and  Gulf  littoral  afford  good 
reason  for  placing  the  routes  of  that  trade  in  a  separate 
class.  The  main  entrance  from  the  Atlantic  to  the  Gulf 
is  the  Florida  Strait;  the  principal  gateway  to  the  Carib- 
bean is  the  Windward  Passage,  at  the  east  end  of  Cuba; 
but  the  Mona  Passage,  east  of  Porto  Rico,  and  other  chan- 
nels to  the  south,  are  also  used.  Vessels  enter  the  Gulf 
either  to  handle  the  grain  and  lumber  exports  from  the 
Gulf  cities  of  the  United  States,  or  to  make  the  circuit  of 
the  Gulf  and  to  share  in  the  general  trade  of  the  adjacent 
countries  with  each  other  and  with  Europe  and  the  IS'orth 
Atlantic  ports  of  the  United  States.  Likewise  the  ships 
entering  the  Caribbean  from  the  United  States  or  Europe 
call  at  several  ports  and  make  at  least  a  partial  circuit. 
Moreover,  there  is  a  growing  trade  carried  on  entirely 
within   the    American  Mediterranean   between  the   Gulf 


WAYS  AND  TERMINALS  OF  OCEAN  TRANSPORTATION     49 

coast  of  the  United  States  and  the  ports  to  the  south.  The 
lines  followed  by  the  traffic  of  the  Gulf  and  Caribbean 
are  so  complex  that  they  may  be  more  accurately  called  a 
system  of  routes  than  a  trunk  line. 

6.  The  most  important  trade  route  within  the  Pacific 
is  the  one  connecting  Xorth  America  and  Asia,  Having 
for  its  American  termini  the  chief  ports  from  San  Diego 
to  Vancouver,  and  for  its  Asiatic  focus  Yokohama,  with 
extensions  from  that  port  of  call  to  other  Japanese  ports, 
to  Shanghai  and  other  cities  of  the  mainland,  and  to  Manila, 
this  North  Pacific  trunk  line  is  the  route  of  the  rapidly 
developing  transpacific  trade.  The  shortest  course  across 
the  ocean  being  by  the  great  circle,  that  northerly  route  is 
taken,  except  by  such  line  vessels  as  call  at  Honolulu  and 
thereby  add  96-i  miles  to  the  voyage  from  San  Francisco 
across. 

7.  One  other  route  calls  for  special  mention,  the  one 
from  the  Pacific  coast  of  North  America  to  Australasia. 
This  Pacific  coast-Australasian  trunk  line  has  for  its  two 
main  termini  in  America  San  Francisco  and  the  Vancou- 
ver-Puget  Sound  section.  New  Zealand  and  Australia  are 
its  western  termini.  The  sailings  over  this  triuik  line  are 
most  frequent  via  Honolulu  and  Samoa,  and  thence  either 
to  ^ew  Zealand  or  to  Australia;  but  another  course  much 
followed  is  from  San  Francisco  via  Tahiti  in  the  Society 
Islands,  and  thence  either  direct  to  Sydney  or  to  New  Zea- 
land, and  thence  to  Australia.  The  fast-mail  route  from 
Australia  to  Europe  is  across  the  Pacific  to  San  Francisco 
or  Vancouver,  across  the  continent  by  rail  to  New  York 
or  Halifax,  and  on  by  express  steamer.  The  freight  traffic 
between  Australasia  and  the  western  coast  of  North  Amer- 
ica is  not  so  heavy  as  that  over  the  other  ocean  trunk 
routes  described,  and  the  opening  of  the  Panama  Canal  will 
restrict  the  future  growth  of  the  business  done  by  this 
route. 


50       OCEAN   AND    INLAND   WATER  TRANSPORTATION 

Tlicsc  .seven  i;ciiei'al  i-oiites  oi-  trunk  lines  (jf  ocean 
traflie  are  hut  a  few  of  the  many  tracks  foUoAved  by  the 
world's  slii[)j)ini;'.  "^riicse  tracks  cross  and  reeross,  and  ves- 
sels are  constantly  ]iassing  from  one  ti-nnk  route  or 
li.rancli  lin(^  to  another  in  response  to  demands  of  the 
world's  intricate  eonnnercial  movements.  A  study  of  the 
accompanying  chart  will  serve  to  locate  the  most  important 
ocean  i-oules  followed  by  steamers  and  sailing  vessels.  The 
general  divergence  of  steamer  and  sailing  routes  in  the 
Atlantic  and  Pacific  is  shown.  The  chart  is  taken  from  a 
report  which  the  author  prepared  for  the  Isthmian  Canal 
(^onunission  of  181)9-1904,  and  shows  distances  by  pres- 
ent routes  and  by  those  that  would  have  been  created  by 
the  Nicaragna  Canal.  The  report  also  compares  the  dis- 
tances by  the  Nicaragua  and  Panama  rontes. 

This  chart  thns  shows  in  a  general  way  how  the  Pan- 
ama Canal  will  modify  (1)  the  ocean  rontes  connecting 
the  Pacific  coast  of  the  three  Americas  with  the  southern 
and  eastern  sections  of  the  United  States;  (2)  the  rontes 
between  the  Pacific  coast  of  the  Americas  and  Europe; 
and  (3)  the  routes  connecting  the  Atlantic  and  Gulf  sea- 
boards of  the  United  States  with  Australasia,  China,  and 
Japan.  The  Panama  Canal  will  shorten  the  routes  af- 
fected by  it  far  more  than  the  Suez  Canal  did  the  routes 
that  came  under  its  influence. 

The  effects  which  the  Panama  Canal  will  have  upon 
the  length  of  ocean  routes  is  illustrated  by  the  following 
table,  giving  the  distances  in  nautical  miles  by  the  shortest 
existing  eonnnercial  route  and  by  the  Panama  Canal  from 
l^ew  York,  New  Orleans,  and  Liverpool,  to  San  Francisco 
(the  representative  Pacific  port  of  the  United  States), 
Iquique  (the  chief  nitrate  port  in  northern  Chile),  Yoko- 
hama and  Shanghai  (the  chief  ports  of  Japan  and  China), 
and  Sydney  (the  most  important  port  of  Australia): 


l'2   fio^        n 


liO^ 


110° 


• 


—  DISTANCES  B<  EXISTIHO  LINES 
mUKAGUA  AND  PANAMA  CANALS 


o 


WAYS  AND  TERMINALS  OF  OCEAN  TRANSPORTATION      51 

TABLE  OF  DISTANCES  VIA  THE  PANAMA  CANAL  AND  VIA 
EXISTING  ROUTES  • 


San 
Fran- 
cisco. 

Yoko- 
hama. 

Shang- 
hai. 

Sydney. 

Iquique. 

New  York  via  present  route. .  . 

Panama  Canal 

Saving  by  canal 

I.  11. 

13,714 

5,299 
8,415 

I.  II. 
14,114 

4,698 
9,416 

III. 
13,564 

IV. 
9,835 
3,729 

III. 
12,514 

V. 

10,885 

1,629 

VI. 

13,658 

VII. 

9,814 

3,844 

I. 
9,221 

4,021 
5,200 

New  Orleans  via  present  route . 
Panama  Canal   

III.     !     III. 

14,929    13,879 

IV.    1       V. 

9,2.34  1  10.284 

VI. 
14,625 

VII. 
9,213 
5,412 

I. 
9,621 

3,420 

Saving  by  canal 

5,695 

3,595 

6,201 

Liverpool  via  present  route . . . 
Panama  Canal 

I.  II. 

14,084 

8,830 
6,046 

III. 
11,640 

IV. 
12, .574 

-934 

III. 
10,580 

V. 
13,624 
-3,044 

VIII. 
12,234 

VII. 
12,.5.53 

-319 

I. 

9,591 

6,760 
2,831 

Sav^ing  by  canal 

I.  Via  Straits  of  Magellan. 

II.  Via  Pernambuco  and  Callao. 

III.  Via  Suez  Canal. 

IV.  Via  San  Francisco. 

V.  Via  San  Francisco  and  Yokohama. 

VI.  Via  St.  Vincent,  Cape  of  Good  Hope,  Adelaide,  and  Melbourne. 

VII.  Via  Wellington. 

VIII.  Via  Suez  Canal,  Colombo,  King  George,  George  Sound,  and  Adelaide. 

The  volume  of  traffic  that  will  immediately  make  use 
of  the  Panama  route  will  be  less  than  the  tonnage  that  will 
then  be  passing  the  Suez  waterway;  but  the  commerce  by 
way  of  the  American  Isthmus  will  in  all  probability  ulti- 
mately exceed  the  volume  of  trade  served  by  the  Suez 
(^anal.  The  net  register  tonnage  of  the  vessels  that  passed 
through  the  Suez  Canal  in  lOO-t  was  13,401,835.  The 
tolls  are  8.50  francs  per  ton  net  register. 

The  Panama   Canal   will   be  the  fourth  an'd  greatest 


'  This  is  a  part  of  a  table  published  on  p.  83  of  Dr.  J.  R.  Smith's 
monograph  on  the  "  Organization  of  Ocean  Commerce." 


52       OCEAN   AND   INLAND   AN'ATKR  TRANSPORTATION 

of  the  Avorld's  istliiuian  waterways  constructed  to  shorten 
ocean-trade  routes.  J'he  first  and  most  important  of  the 
three  thus  far  <'()m])leted  is  the  Suez  Canal,  wliicli  was  he- 
gun  in  is.")!)  and  opened  for  trath(;  in  ISOiJ.  The  cost  of 
the  canal  u])  to  the  time  of  coinpletion  was  £10,()32,95:j 
(al)out  $.SO,()0(),()()0).  The  length  of  the  waterway  from 
Port  Said  to  Suez  is  88  nautical  or  100  English  miles.  Of 
the  88  nautical  miles,  27  miles  come  within  four  lakes 
formed  hy  tiooding  depressions  along  the  line  of  the  canal, 
which  is  a  seadevel  waterway.  The  present  dej)th  of  the 
canal  at  h^w  water  is  31.1  feet.  Work  now  in  progress  will 
increase  the  dejjtli  to  34.4  feet.  The  Suez  Canal  was  con- 
structed mainly  to  shorten  the  ocean  distance  from  Europe 
and  the  eastern  half  of  the  Urdted  States  to  the  East 
Indies,  China,  and  Japan;  and  secondarily  to  give  a  shorter 
route  to  Australia  and  eastern  Africa.  The  navigation 
of  the  Red  Sea  not  being  practicable  for  sailing  vessels 
the  Suez  route  is  used  only  by  steamers.  The  following 
table  gives  the  distances  from  Liver] )ool  and  Xcw  York 
via  the  Cape  of  Good  IIo]ie  and  the  Suez  ( 'anal  to  a  typical 
port  in  India,  Java,  China,  and  Australia,  and  states  the 
number  of  miles  saved  bv  the  (Amal: 


From 

To 
Bombay. 

To                 To 
Batavia.     Hongkong. 

To 
Syflney. 

Liverpool  via 

Cape  TowTi 

10,98.5        11.01.3  !     1 3,406 » 
6,241   !       8,567  |       9,731 

12,940 

Suez  Canal 

12,036' 

Distance  saved 

4,744 
11,465 

2,946         3,675 
11093         13SS63 

804 

New  York  via 

Cape  Town  ^ 

13,420 

Suez  Canal 

8,' 35   i     in.491         11.6.55 

13.960' 

3,300 

Distance  saved 

1,502         2,231 

—540 

*  Via  Colombo  and  Melbourne. 
^  Including  c.ill  at  St.  Vincent. 
'  Via  Singapore. 


WAYS  AND  TERMINALS  OF  OCEAN  TRANSPORTATION     53 

From  Liverpool  and  other  north  European  ports  to  the 
East  Indies  and  the  Orient  the  Suez  Canal  shortens  the 
distances  from  25  to  45  per  cent;  while  there  is  but  a  small 
reduction  in  the  length  of  the  routes  to  the  chief  ports  of 
Australia.  In  comparison,  it  may  be  noted  that  the  Pan- 
ama Canal  "will  reduce  the  length  of  the  ocean  route 
between  our  two  seaboards  from  13,714  to  5,209  nautical 
miles,  and  effect  a  saving  of  8,415  miles,  or  over  61  per 
cent;  the  distances  from  JSTew  York  to  the  centers  of  the 
heavy  traffic  on  the  west  coast  of  South  America  will  be 
shortened  fully  50  per  cent  on  the  average.  The  Panama 
Canal  will  shorten  the  ocean  voyage  from  Liverpool  to  San 
Francisco  43  per  cent,  and  to  Iquique  30  per  cent.  The 
route  from  Xew  York  to  Australian  ports  by  way  of  the 
Cape  of  Good  Hope  is  shorter  than  via  the  Suez  Canal  and 
Colombo;  the  Panama  route  from  Kew  York  to  Sydney 
will  be  3,844  miles  (28  per  cent)  shorter  than  the  Suez 
line.  Between  Australia  and  the  British  Channel  the  Suez 
route  is  shorter  than  the  one  by  Panama,  but  from  Xew 
Zealand  to  Great  Britain  the  American  canal  route  will  be 
15  per  cent  shorter  than  the  Suez  route. 

The  Corinth  Canal,  l)egun  in  1884  and  completed  in 
1893,  at  a  cost  of  $13,750,000,  is  a  waterway  four  miles 
long,  comiecting  the  Gulf  of  Corinth,  or  Lepanto,  with  the 
Gulf  of  JEgina.  It  was  constructed  to  save  the  trip  around 
Morea,  the  southern  peninsula  of  Greece,  and  it  shortens 
the  distance  between  the  Adriatic  and  Black  Seas  about 
185  miles,  and  between  the  Strait  of  Messina  and  the  Black 
Sea  95  miles.  The  construction  of  the  canal  was  more  ex- 
pensive than  was  anticipated,  because  the  rock  to  be  exca- 
vated was  of  extreme  hardness.  The  traffic  of  the  canal 
has  been  much  less  than  was  estimated,  althougli  tolls  of 
only  18  cents  per  ton  and  20  cents  per  passenger  are 
charged.  Most  ships  of  much  size  ]irefer  the  old  open-sea 
route  to  the  shorter  canal  route,  because  the  navigation  of 


54       OCEAN   AND  INLAND  WATER  TRANSPORTATION 

the  canal  is  somewhat  difficult.  The  bottom  width  is  only 
08  feet,  11  inches,  the  depth  20  feet,  3  inches,  and  through 
the  rock  cut,  32G  yards  long,  tlie  surface  of  the  canal  is 
only  80  feet  wide,  although  the  cutting  reaches  a  nuixinnun 
depth  of  200  feet.  Tho  currents  of  air  llir(»ngh  the  canal 
trench  are  strong;  and,  what  is  worse,  high  ti(h'  in  tlie  (Inlf 
of  Corinth  does  not  come  at  the  same  time  as  in  the  (lulf 
of  .Egina,  and  this  causes  tidal  currents  through  the  canal. 
Although  these  tidal  currents  can  be  controlled,  it  does  not 
seem  probable  that  the  Corinth  Canal  will  ever  succeed  in 
exerting  much  influence  u])on  the  routes  of  ocean  com- 
merce. 

The  Baltic,  or  JSTord-Ost-See,  Canal  has  been  more  suc- 
cessful than  the  Corinth  waterway.  The  Kaiser  Wilhelm 
Canal,  as  it  is  officially  called,  begun  in  1887  and  completed 
in  1895,  was  constructed  by  the  German  Government  for 
naval  and  commercial  reasons.  It  connects  the  Xortli  Sea 
and  Baltic  seaboards  of  Germany  by  an  ocean  ship  canal 
lying  entirely  within  German  territory,  thereby  greatly 
strengthening  the  German  navy.  The  distance  between 
the  ports  of  the  two  seaboards  of  Germany  is  shortened 
from  300  to  400  miles,  and  the  dangerous  passage  through 
the  Skager  Rack  is  obviated.  The  canal  is  01  miles  long, 
and  connects  Kiel  Bay  with  the  mouth  of  the  Ell)e  River 
at  Brunsbiittel.  Its  dimensions  are:  depth,  29^  feet;  bot- 
tom width,  72  feet;  minimum  surface  width,  190  feet.  It 
has  no  locks  except  tiiose  at  the  ends,  which  are  necessary 
on  account  of  the  tides.  The  waterway  is  used  by  a  large 
number  of  small  vessels  and  by  barges;  the  traffic  for  the 
year  ending  IMarch  31,  1905,  consisted  of  32,031  iiierchant 
craft,  with  a  tonnage  of  5,270,477.  The  tolls  and  dues 
amounted  to  $010,035.  The  receipts  now  ecpuil  the  op- 
erating expenses.  The  traffic  and  receipts  show  a  steady 
but  not  rapid  gain,  the  tonnage  increase  during  the  past 
six  years  having  been  from  3,117,840  tons  in  1899  to  the 


WAYS  AND  TERMINALS  OF  OCEAN  TRANSPORTATION      55 

figures  just  given  for  1905,  a  gain  of  69  per  cent.  The 
canal  was  constructed  for  the  low  cost  of  $40,000,000,  and 
it  is  probable  that  the  German  Government  will  keep  the 
tolls  low,  and  seek  to  stimulate  trade  and  commerce  rather 
than  to  secure  interest  on  the  sum  invested  in  the  water- 
way. 

The  canals  just  described  have  l)ccn  constructed  to 
shorten  ocean  routes.  Of  even  greater  importance  to  the 
trade  of  their  jjarticular  port  and  country  are  the  Amster- 
dam and  Manchester  canals,  whose  purpose  is  to  extend 
ocean  routes  from  the  seaboard  inland.  The  canal  from 
Ymuiden,  on  the  Xortli  Sea,  to  Amsterdam,  w^as  opened 
for  traffic  in  1876,  Its  length  is  15^  miles,  and  its  dimen- 
sions are  now  being  enlarged  to  a  depth  of  32  feet,  and  a 
minimum  bottom  width  of  165  feet.  The  tendency  of  the 
trade  of  Holland  has  been  to  concentrate  at  Rotterdam, 
the  great  port  near  the  mouth  of  the  Rhine;  but  by  being 
provided  with  the  jSJ^orth  Sea  Canal  for  large  ocean  vessels, 
with  a  waterway  12  feet  in  depth  connecting  the  city  with 
the  Rhine,  and  with  numerous  other  canals  for  barges  and 
small  steamers,  Amsterdam  has  been  able  to  increase  its 
trade  slowly,  but  steadily,  and  to  the  unquestionable  advan- 
tage of  the  industries  and  trade  of  Holland.  The  traffic 
passing  the  lock  at  Ymuiden  in  1899  comprised  1,222  ves- 
sels, with  a  net  tonnage  of  4,029,356.  In  1904  the  figures, 
for  net  tonnage  were  4,662,229. 

The  Manchester  Ship  Canal  carries  ocean  ships  inland 
35^  miles,  and  raises  them  by  means  of  four  locks  to  an 
elevation  of  60  feet  above  sea  level.  This  waterway,  com- 
pleted in  1894  at  a  cost  of  $75,000,000,  terminates  inland 
in  an  extensive  system  of  docks,  and  Manchester  has  been 
made  a  seaport  M'ith  a  commodious  harbor.  The  depth  of 
the  canal  is  being  increased  from  26  to  28  feet  at  low 
water.  The  minimum  bottom  wndth  is  120  feet.  The  cost 
of  the  canal  far  exceeded  the  estimates,  and  the  traffic  has 


50       OCEAN   AND  INLAND   WATER  TRANSPORTATION 

not  grown  so  fast  as  was  cxiiectecl ;  hut  in  18!)9,  at  the  end 
of  five  years,  5,182  vessels,  registering  l,.'>l)r>,702  tons,  and 
carrying  2,778,108  tons  of  cargo,  passed  the  locks.  In 
11)04,  at  the  end  of  ten  years,  the  traffic  comprised  3,017,- 
578  tons  of  freight.  Tlic;  gross  recei])ts  from  all  sources 
"during  1904  were  £418,043  ($2,035,8f;i>).  This  sum 
covered  the  operating  expenses,  and  left  £177,748  ($865,- 
632)  to  be  applied  toward  the  interest  charges.  The  caual 
was  coustructed  l)y  a  seniipublic  corporatiou,  to  which  the 
City  of  Manchester  loaned  $25,000,000.  The  company  is 
now  so  organized  as  to  give  representatives  of  the  City 
of  Manchester  a  majority  in  the  board  of  directors. 

By  the  canalization  of  the  Clyde,  the  Thames,  the  Elbe, 
the  Weser,  the  lower  Rhine,  the  Scheldt,  the  Delaware 
and  Columbia,  and  other  rivers,  and  by  opening  channels 
across  the  bars  obstructing  the  entrance  to  Liverpool,  Xew 
York,  ISTew  Orleans,  Galveston,  Portland,  and  many  other 
important  ports,  a  great  expansion  of  commerce  has  been 
made  possible,  and  the  usefulness  of  the  ocean  as  the 
w^orld's  trade  highway  has  been  largely  enhanced.  The 
improvement  of  the  approaches  to  ports  by  constructing 
a  canal,  canalizing  a  river,  or  dredging  a  submerged  chan- 
nel, is,  however,  a  part  of  the  work  of  providing  terminals 
adapted  to  the  requirements  of  present-day  commerce. 

The  modern  port,  or  the  terminal  of  an  ocean  route, 
usually  comprises  three  distinct  parts:  the  channel  from 
the  sea,  the  harbor  proper,  and  the  facilities  for  receiving 
and  forw^arding  traffic.  Some  seaports — none,  however, 
of  the  first  rank — are  provided  by  nature  with  channels 
and  harbor  basins  of  adequate  depth  and  size;  in  most  in- 
stances, the  channel  and  harbor,  as  well  as  the  facilities  for 
handling  traffic,  are  more  or  less  artificial. 

Ports  are  of  four  different  types:  the  roadstead,  the 
natural  bay,  the  river  port,  and  the  combination  of  river 
and  bay  port.    As  examples  of  the  roadstead  type  may  be 


WAYS  AND  TERMINALS  OF  OCEAN  TRANSPORTATION      57 

mentioned  Boulogne  (France),  Dover  (England),  and  San 
Pedro  (California).  These  cities  are  located  on  the  ocean 
shore,  where  no  natural  embajment  provides  quiet  water 
for  anchorage.  In  the  case  of  these,  and  other  cities  that 
might  be  mentioned,  harbors  are  being  created  at  Govern- 
ment expense,  by  the  construction  of  costly  breakwaters, 
and  by  the  dredging  of  the  basins  thereby  inclosed. 

The  Puget  Sound  ports,  and  San  Prancisco,  Pensacola, 
and  Boston,  in  the  United  States,  Southampton  in  England, 
and  many  other  cities  similarly  located,  are  examples  of 
natural  bay  ports.  In  some  cases,  as,  for  instance,  at  Mo- 
bile, Ala.,  the  bay  on  which  the  city  is  located  has  to  be 
dredged  to  accommodate  the  deep-draft  vessels  now  em- 
ployed in  ocean  commerce.  The  city  located  on  a  bay  of 
ample  area,  and  of  thirty  feet  and  more  in  depth  at  low 
tide,  can  provide  a  terminal  for  handling  ocean  traffic  at  a 
relatively  small  expense;  but  the  trade  of  a  city  so  located 
will  generally  be  less  than  that  handled  at  a  city  located 
near  the  mouth  of  a  large  river,  because  the  river  affords 
connection  with  a  large  inland  area  of  production  and  con- 
sumption. I'he  river  port  usually  has  a  better  Tlinterland 
than  the  bay  port  has. 

London,  Hamburg,  Bremen,  Rotterdam,  Antwerp, 
Philadelphia,  ISTew  Orleans,  and  Portland,  are  conspicuous 
examples  of  river  ports,  and  this  partial  list  shows  that 
most  of  the  great  seaports  are  located  on  rivers.  The 
cheapening  of  rail  transportation,  and  the  increasing  effi- 
ciency of  the  railroad,  are  giving  the  roadstead  and  bay 
ports  greater  possibilities,  1)V  enabling  them  to  com])ete 
with  river  ports  over  a  wider  traffic  area;  but  the  extensive 
impi-ovements  of  inland  waterways  and  the  technical  de- 
velopment of  inland  navigation  are  likewise  building  uj)  the 
trade  of  the  river  ports.  IIaml)urg  and  Rotterdam  are 
the  ports  whose  trade  has  increased  most  rapidly  during 
recent  years. 


58       OCEAN   AND   INLAND   WATER  TRANSPORTATION 

A  city  located  as  New  York  k,  at  the  head  of  a  bay  and 
also  on  a  large  river,  has  the  most  favorable  location  jios- 
sible.  The  maritime  commerce  of  Xew  York,  coastwise 
and  foreign,  exceeds  that  of  any  other  port  of  the  world. 
The  lllnterJand  of  Xew  York  city  extends  west  nearly  to 
the  Missouri  River,  and  when  the  city  is  connected  with 
the  Great  Lakes  by  a  waterway  that  will  accommodate 
barges  carrying  1,000  tons  of  cargo,  and  is  thereby  given 
facilities  for  inland  navigation  comparable  with  those  now 
possessed  by  Rotterdam  and  Hamburg,  New  York  will  be 
able  to  take  far  greater  advantage,  than  is  possible  under 
present  conditions,  of  the  development  of  the  vast  inland 
tributary  territory. 

Classified  according  to  the  authority  that  improves  and 
administers  them,  ports  are  public,  semipublic,  and  private. 
While  all  seaports,  whether  the  harbor  facilities  are  con- 
structed with  public  funds  or  private  capital,  are  open  to 
the  use  of  the  public  under  Government  regulation,  at 
some  ports  the  channels  and  basins  are  improved  by  the 
city  or  State  in  wdiich  the  port  is  situated,  and  the  land 
fronting  the  harbor  is  owned  by  the  city  or  State;  again, 
at  other  ports  the  channel,  harbor  area,  and  dock  prop- 
erties are  constructed,  owned,  and  administered  by  a  public 
"  trust  "  or  nonprofit  corporation  acting  under  authority 
granted  by  the  State  and  municipality;  and  there  also  are 
ports  that  have  been  created  by  railroad  and  industrial 
companies  to  enable  them  to  develop  their  trafiic  and  busi- 
ness. 

Bristol,  England,  affords  a  good  instance  of  a  public 
port.  The  municipality  now  owns  and  manages  as  a 
branch  of  the  city  government  the  entire  port  and  its  facili- 
ties. Preston,  England,  is  another  municipal  port.  Most 
of  the  larger  ports  of  England,  however,  are  in  charge  of 
public  trusts.  The  public  trust — e.  g.,  the  Mersey  Docks 
and  Harbor  Board  at  Liverpool — -derives  its  powers  from 


WAYS  AND  TERMINALS  OF  OCEAN  TRANSPORTATION      59 

Parliament,  and  is  composed  of  nonsalaried  representa- 
tives of  the  municipality  and  of  the  various  commercial 
organizations  and  interests  centered  at  the  port.  The 
trust  raises  the  capital  required  to  improve  and  administer 
the  port  hj  levying  various  port  and  dock  charges,  and 
l)y  borrowing  money  upon  the  security  of  its  authorized 
charges. 

A  good  example  of  a  large  private  port  in  England  is 
Southampton,  where  the  London  and  Southwestern  Hall- 
way has  constructed  extensive  docks  and  provided  all  the 
various  facilities  required  for  passenger  business,  and  for 
handling  freight  traffic  of  practically  all  kinds. 

The  central  Government,  or  Parliament,  has  not  aided 
in  the  construction  of  harbors,  except  to  carry  out  certain 
works  for  naval  purposes.  The  port  of  Dover,  for  instance, 
has  recently  been  made  a  harbor  that  will  accommodate 
hirge  naval  and  merchant  ships,  and  Parliament  has  borne 
a  part  of  the  expense. 

On  the  Continent  of  Europe  the  public  type  of  port 
jirevails.  In  France  the  central  Government  is  the  au- 
thority; but  in  Germany  the  local  Government  creates  the 
port  and  its  facilities,  some  aid  for  dredging  the  channels 
being  received  from  the  State  Government — not  from  the 
Empire. 

The  American  system  of  harbor  construction  and  ad- 
ministration is  somewhat  complicated.  The  harbor  basin 
and  channel  from  the  sea  are  dredged  and  maintained  by 
the  jSTational  Government.  The  Federal  authorities  mark 
the  line  to  which  the  piers  and  wharves  may  extend  from 
the  shore  into  the  channel.  From  the  pier  line  shoreward 
tlie  State  has  jurisdiction;  and  the  State  may  either  exer- 
cise this  jurisdiction  directly,  as  is  the  case  with  Louisiana 
at  iSTew  Orleans,  and  California  and  the  State  of  Washing- 
ton, or  the  State  may  vest  the  port  administration  with 
the  municipal  Government.  The  division  of  authority  be- 
6 


GO       OCEAN   AND   INLAND  WATER  TRANSPORTATION 

tween  State  and  iiimiicijia]  ((fficers  assumes  various  forms, 
each  State  having  hiws  peculiar  to  itself. 

The  State  system  of  harbor  administration  in  the 
United  States  is  well  illustrated  by  California,  where  the 
State  retains  the  ownership  of  the  water  frontage,  and  ad- 
ministers the  ports  through  a  Board  of  State  Harbor  Com- 
missioners. The  board  can  locate  and  construct  wharves, 
erect  all  necessary  improvements,  and,  together  with  the 
governor  and  mayor,  may  fix  rates  for  dockage  and  wharf- 
age. 

At  the  port  of  New  York,  the  Commissioner  of  Docks^ 
appointed  by  the  mayor,  is  the  administrative  officer. 
Most  docks  and  wharves  are  owned  by  the  city  under  a 
grant  dating  from  colonial  times;  however,  a  part  of  the 
water  front  is  claimed  as  private  property,  of  which  the 
city  is  endeavoring  to  secure  possession.  In  1890  a  Board 
of  United  States  Engineers  established  a  bulkhead  line 
around  the  island,  and  a  masonry  bulkhead  is  being  con- 
structed that  will  in  time  surround  the  island.  As  Mr. 
Byall  states:  "Wharf  construction  is  now  systematically 
planned  and  carried  out  under  the  Commissioner  of  Docks, 
appointed  by  the  mayor.  The  wharves  are  leased  for 
terms  of  years  varying  from  ten  years  to  those  terminable 
at  the  pleasure  of  the  commissioner,  and  at  rentals  of  from 
$50  to  $100,000  per  year  under  one  lease.  " 

The  port  of  Philadelphia  is  administered  by  a  Board 
of  Port  Wardens,  consisting  of  a  master  warden,  ap- 
pointed by  the  governor  of  the  State,  and  sixteen  assistant 
wardens  selected  by  the  City  Councils,  This  board,  since 
1870,  has  constituted  a  part  of  the  city  government  known 
as  "  the  Department  of  Port  Wardens,  "  and  is  supported 
by  appropriations  from  the  city  treasury.  The  Board  of 
Port  Wardens  has  control  of  the  port  of  Philadelphia  in 
accordance  with  State  laws  and  city  ordinances,  and  acts 
mainly  through  the  Master  Warden  and  the  Harbor  Mas- 


WAYS  AND  TERMINALS  OF  OCEAN  TRANSPORTATION      61 

ter.  The  water  frontage,  except  at  the  ends  of  streets,  is 
privately  owned;  and  the  wharves  and  piers,  with  the  ex- 
ception of  a  public  one  erected  by  the  city  at  a  street  termi- 
nal, are  built  and  owned  by  the  owners  of  the  frontage. 
The  private  piers  are  constructed  according  to  plans  and 
upon  kjcations  approved  by  the  Board  of  Port  Wardens, 
and  the  board  has  the  power  to  require  the  owners  of 
private  piers  to  permit  vessels  not  belonging  to  them  to 
h)ad  or  unload  at  the  piers.  The  ownership  of  the  pier 
is  ]3rivate ;  its  use  is  both  public  and  private. 

There  are  many  variations  in  the  systems  of  port  con- 
trol prevailing  in  the  United  States,  but  the  three  cities 
referred  to  represent  the  chief  types  of  ownership  and  ad- 
ministration. At  San  Francisco,  the  State  owns  the  port 
property  and  administers  it  by  a  State  board;  in  New 
York,  the  city  owns  or  is  acquiring  the  port  facilities,  and 
a  city  officer  is  in  control;  in  Philadelphia,  the  piers  and 
wharves  are  private  property,  and  the  Board  of  Port 
Wardens  represents  both  the  State  and  city  governments. 

The  development  of  ocean  transportation  during  the 
past  century  has  required  great  technical  improvements  in 
the  terminals  of  ocean  routes.  A  hundred  years  ago,  chan- 
nels and  basins  ten  to  fifteen  feet  in  depth  could  accommo- 
date the  vessels  then  in  service;  now,  no  port  can  handle 
a  large  ocean  commerce  without  approaches  and  anchorage 
at  least  thirty  feet  in  depth  at  low  tide,  and  for  ports  of 
the  first  rank,  like  ISTew  York,  forty  feet  has  come  to  be 
necessary.  The  largest  ocean  ships  are  now  constructed 
with  reference  to  a  maximum  draft  of  thirty-two  to  thirty- 
five  feet. 

Formerly,  vessels  were  loaded  and  unloaded  by  hand 
labor,  and  small  warehouses  served  to  store  the  cargo; 
now,  each  vesssel  is  equipped  with  steam  windlasses,  and 
there  are  steam  and  hydraulic  cranes,  powerful  coal  dumps, 
and  other  hoisting  ajDparatus,  stationary  and  floating  ele- 


62       OCEAN   AND   INLAND   WATER  TRANSPORTATION 

vators,  and  many  kinds  of  mechanical  apjjliances  located 
without  the  ship  to  hasten  and  lessen  the  work  of  handling 
cargo.  In  the  largest  and  most  modern  ports  the  one- 
story  warehouses  of  former  days  have  been  supplanted  by 
two-,  three-,  and  four-storied  structures  of  steel  or  masonry. 
The  warehouses  are  not  only  equipped  with  powerful  ele- 
vators, but  are  so  designed  and  operated  that  cargo  may  be 
handled  directly  l)ctwecn  each  story  and  the  ludd  of  the 
ship. 

A  great  port  like  Hamburg  affords  a  most  striking 
illustration  of  the  tendency  of  the  age  to  economize  labor 
by  investing  capital  in  machinery.  The  ocean  port,  includ- 
ing its  channel,  basins,  docks,  piers,  elevators,  and  facilities 
for  handling  and  warehousing  cargo,  requires  enormous  ex- 
penditures for  construction,  maintenance,  and  operation; 
but  here,  as  elsewhere,  the  work  of  the  world  can  be  more 
fully  and  more  economically  done  by  substituting  capital 
costs  for  labor  expenses. 


referencj:s  for  further  reading 

Smith,  J.  R.  "  The  Organization  of  Ocean  Commerce."  Publica- 
tions of  the  University  of  Pennsylvania.  Philadelphia.  J905. 
(Part  II  of  this  valuable  work  deals  with  "  Routes  and  Ship- 
ing,"  Part  III  with  "Harbors  and  Port  Facihties.") 

Smith,  J.  R.  "  The  British  System  of  ImproAnng  and  Administering 
Ports  and  Terminal  Facilities. "  Annals  of  the  American 
Academy  of  Political  and  Social  Science,  vol.  xxiv.,  pp.  507- 
524.     November,  1904. 

Byall,  J.  B.  "  The  American  System  of  Improving  and  Adminis- 
tering Commercial  Facilities."     Ibid.,  pp.  489-506. 

HuEBNER,  S.     "  Relation  of  the  Government  in  Germany  to  the 
Promotion  of  Commerce."     Ibid.,  pp.  525-39. 
%" Great  Canals  of  the  World."    Monthly  Summary  of  Commerce 
and  .Finance,  January,  1905.      Bureau  of  Statistics,  Depart- 
ment of  Commerce  and  Labor,  Washington,  D.  C. 


WAYS  AND  TERMINALS  OF  OCEAX  TRANSPORTATIOX      63 

Johnson,  E.  R.  "  Industrial  and  Commercial  Value  of  an  Isthmian 
Canal."  Appendix  NN  and  Plates  74,  75,  and  76,  Report  of 
Isthmian  Canal  Commission,  1899-1901. 

Report  of  the  Board  of  Consulting  Engineers  for  the  Panama 
Canal,  1906.  (Appendix  D  of  this  report  describes  the  Man- 
chester, Kiel,  Amsterdam,  Suez,  Corinth,  and  St.  Mary's  Falls 
canals.) 


h 


I, 


PART   II 
THE    OCEAN    TEANSPOETATION    SERVICE 


CHAPTER    V 


THE    OCEAN    FEEIGIIT    SERVICE 


The  business  of  ocean  transportation,  like  tliat  of  rail 
carriage,  comprises  the  freight,  passenger,  mail,  and  ex- 
press services,  and  each  branch  of  the  service  merits  sep- 
arate consideration. 

The  freight  and  passenger  services  on  the  ocean  are 
mainly  performed  by  different  kinds  of  ships,  and  the  two 
services  are  nearly  distinct.  The  passenger  traffic  is  now 
all  handled  by  steamers,  and  the  vessels  are  operated  as 
"  lines  "  whose  ships  have  definite  routes  and  a  fixed  sched- 
ule of  sailings.  Freight,  however,  is  handled  both  by 
sailing  vessels  and  by  steamers,  and  both  classes  of  ships 
may  be  run  as  lines  having  fixed  sailings,  or  may  be  em- 
ployed as  chartered  vessels  hired  to  be  dispatched  to  such 
places  and  at  such  times  as  the  demands  of  shippers  may 
determine.  Accordingly,  ocean  freight  is  moved  as  "  line  " 
or  schedule  traffic,  and  as  charter  or  nonschedule  traffic. 
In  this  regard  there  is  a  general  analogy  between  rail  and 
ocean  traffic.  Most  rail  freight  is  forwarded  at  the  con- 
venience of  the  shipper,  and  by  trains  that  have  no  fixed 
schedules;  but  there  is  also  a  growing  volume  of  schedule 
freight — fruit,  milk,  dressed  meat,  etc. — handled  by  trains 
operated  upon  a  definite  schedule. 

The  differentiation  of  the  freight  and  express  services 
is  not  so  sharp  on  the  ocean  as  upon  the  railway.  While 
express  companies  do  an  international  business,  and  ship 
their  parcels  by  the  passenger  steamers,  the  steamship  com- 

67 


68       OCEAN   AND   INLAND  WATER  TRANSPORTATION 

pany,  as  will  be  explained  later,  does  not  contract,  as  the 
railroad  company  does,  to  turn  all  express  business  over 
to  some  particular  company.  The  ocean  carrier  operating 
fast  steamers  deals  with  cxjjress  companies  as  with  indi- 
vidual shippers;  and  it  itiav  intt  only  carry  packages  for 
several  express  companies,  l)Ut  may  and  does  solicit  the 
high-class  freight  and  package  traffic  from  exporters,  for- 
warders, and  individuals. 

The  nuiil  service  performed  by  ocean  steamers  is  anal- 
ogous with  that  of  the  railroad  company;  in  each  instance 
the  Government  contracts  with  the  carrier  for  a  definite 
service  of  stipulated  speed  and  frequency;  but  the  com- 
pensation of  the  ocean  carrier  is  not  always  based  upon 
the  w'eight  of  the  mail  matter  handled,  as  is  true  in  the 
railway  mail  service,  the  pay  of  the  steamship  company 
being  sometimes  the  amount  of  the  ocean  postage  in  whole 
or  in  part,  and  sometimes  a  definite  annual  sum  of  money. 
In  making  contracts  for  carrying  the  mails,  governments 
often  provide  for  better  facilities  for  freight  and  passenger 
traffic,  and  mail  payments  often  accurately,  but  sometimes 
incorrectly,  are  spoken  of  as  mail  "  subsidies.  " 

The  transportation  of  the  ocean  commerce  of  the 
United  States  is  a  service  of  great  magnitude  and  of  in- 
creasing volume.  The  total  value  of  the  foreign  trade  of 
the  United  States  (imports  and  exports)  for  the  year  end- 
ing June  30,  1905,  was  $2,636,074,340.  Some  of  this, 
but  less  than  5  per  cent  of  the  total,  was  carried  by  rail 
across  our  Northern  and  Southern  borders;  another  small 
fraction  was  carried  across  the  Great  Lakes  lying  between 
our  country  and  Canada ;  but  fully  nine  tenths  of  our  vast 
foreign  commerce  is  maritime  traffic.  The  coastwise  traffic 
of  our  Atlantic,  Gulf,  and  Pacific  seaboards,  while  much 
less  in  volume  and  value  than  our  foreign  trade,  constitutes 
an  additional  maritime  transportation  service  of  large  ton- 
nage, the  exact  amount  of  which,  however,  is  not  recorded. 


THE  OCEAN   FREIGHT  SERVICE  69 

There  is,  moreover,  the  trade  and  traffic  between  the 
United  States  and  its  "  noneontiguoiis  territories,"  which 
in  1904  amounted  to  nearly  $100,000,000  in  vahie.  Fi- 
nally, there  is  the  foreign  trade  of  these  noncontiguous 
territories  with  countries  other  than  the  United  States, 
which  in  1904  exceeded  $50,000,000. 

To  transport  the  foreign  commerce  of  the  United  States 
in  1905,  vessels  with  an  aggregate  tonnage  of  31,000,000 
tons  net  register  entered  and  cleared  our  ports.  What  the 
entrances  or  clearances  of  our  coastwise  fleet  were  at  the 
seaports  of  the  United  States  cannot  be  stated;  but  the 
tonnage  of  our  maritime  coastwise  fleet  exceeds  3,000,000 
tons,  and  the  entrance  or  clearance  figures  would  naturally 
be  several  times  the  enrolled  tonnage.  The  commerce  of 
the  United  States  vj'ith  its  possessions,  and  the  trade  of 
those  possessions  with  the  world  generally,  call  for  an  in- 
creasing shipping  service. 

The  internal  development  of  the  United  States  is 
being  accompanied  by  a  rapid  expansion  of  our  inter- 
national trade.  This  growth  of  international  commerce 
has  been  made  possible  by  cheaper  and  better  transpor- 
tation, both  by  rail  and  by  water,  whereby  both  heavy 
commodities  of  low  value  per  weight,  and  also  perishable 
articles,  have  become  transportable.  The  growth  of  the 
world's  tonnage  during  the  past  fifty  years  has  been  due 
mainly  to  the  steady  increase  in  transportation  of  mineral 
and  forest  products  that  must  be  carried  cheaply,  if  at 
all,  and  secondarily  to  the  constantly  growing  trafiic  in 
fruits,  meats,  and  other  commodities  which  require  a  fast 
freight  service,  refrigeration,  and  special  warehousing 
facilities. 

Freight  traffic,  by  land  and  by  sea,  is  thus  changing 
in  character  as  well  as  increasing  in  volume.  Formerly 
only  nonperishable  articles  of  relatively  high  value  could 
be  successfullv  carried  long  distances;  now  the  world's 


70       OHEAN   AND  INLAND  WATER  TRANSPORTATION 

commerce  includes  a  vastly  wider  and  an  ever  enlarging 
range  of  traffic.  This  same  thought  may  be  differently 
stated,  by  saying  that  the  transportation  service  has 
become  cheaper  for  all  classes  of  traffic;  faster  for  such 
articles  as  require  rapid  transit,  more  relial)le  with  the 
substitution  of  steam  for  sails,  and  more  specialized  with 
reference  to  the  service  to  be  performed.  As  instances 
of  specialization  in  the  ocean  freight  service  may  be  men- 
tioned the  fruit  steamer,  the  tank  steamer  for  carrying 
oil,  and  the  ore  vessels  for  carrying  iron  ore  or  coal. 

The  organization  of  the  ocean  transportation  service 
may  be  discussed  by  considering  (1)  line  and  charter 
traffic,  (2)  the  business  arrangements  whereby  the  move- 
ment of  traffic  is  facilitated,  and  (.3)  the  provisions  for 
the  transfer  of  traffic  at  the  terminals. 

1.  Vessels  are  operated  singly,  or  as  members  of  a 
line.  The  ship  operated  as  a  single  unit,  either  by  its 
owners  or  by  those  that  may  lease  (charter)  the  vessel, 
is  properly  called  a  tramp,  because  the  ship  moves  from 
one  route  to  another  or  from  one  port  to  another  as  its 
services  may  be  desired.  The  larger  share  of  the  bulky 
ocean  traffic  is  carried  by  the  tramp  steamers  and  sailing 
vessels  chartered  to  make  a  particular  voyage  or  to  be 
used  for  a  limited  time.  The  man  or  company  desiring 
to  ship  a  vessel  cargo  of  coal,  or  lumber,  or  locomotives, 
or  raw  cotton,  or  some  such  commodity,  hires  or  charters 
a  vessel  to  perform  the  service.  The  person  of  whom  the 
vessel  is  chartered  operates  the  ship  and  performs  the 
service,  charging  therefore  either  a  certain  rate  per  ton 
of  cargo  or  a  certain  amount  per  month  per  registered 
vessel  ton.  The  means  by  which  the  shipper  secures  the 
vessel  he  wishes,  and  the  manner  in  which  the  rates  are 
determined,  will  be  explained  in  a  later  chapter;  attention 
is  here  called  only  to  the  kind  of  service  rendered  by  the 
chartered  vessel.     The  chartered  vessel,  or  tramp,  like  the 


THE  OCEAN   FREIGHT  SERVICE  71 

freight  car,  takes  freight  when  it  is  ready  to  be  shipped,  and 
is  free  to  go  wherever  there  may  be  a  shipment  to  be  made. 
The  tramp  ship  is  bound  to  no  one  route  and  to  no  fixed 
schedule  of  movements;  it  is  the  independent,  competi- 
tive ocean-freight  carrier. 

Where  there  is  a  steady  flow  of  traffic  in  hirge  vol- 
ume over  a  definite  route,  an  economical  and  efficient 
performance  of  the  ser\ace  requires  that  several  vessels 
shall  be  operated  under  one  management  as  a  line,  and 
that  a  fixed  schedule  of  arrivals  and  departures  shall  be 
maintained.  The  number  of  vessels  in  the  line  and  the 
frequency  of  sailings  will  be  determined  by  the  volume 
of  business.  Whether  the  company  shall  have  the  same 
number  of  ships  in  commission  at  all  times  will  depend 
upon  the  seasonal  or  periodical  fluctuations  in  traffic. 
The  company  operating  a  freight  line  frequently  owns 
vessels  enough  to  handle  only  the  business  of  the  periods 
of  lighter  traffic,  and  charters  such  additional  ships  as 
may  be  needed  from  time  to  time.  The  heavy  freight 
traffic  of  regular  volume  is  best  handled  by  the  line; 
likewise,  fast  freight,  the  transportation  of  passengers, 
and  the  carriage  of  the  mails,  are  services  which  must  be 
performed  upon  schedule  time  by  vessels  operated  as 
lines. 

2.  To  secure  passenger  and  freight  traffic  for  line 
A'essels,  to  obtain  cargoes  for  vessels  seeking  charter 
traffic,  and  to  j^rovide  shipi:)ers  desiring  to  charter  a  ves- 
sel with  the  ship  they  need,  and  at  the  time  and  place 
the  ship  is  wanted,  there  are  passenger  agencies,  froiglit 
forwarders,  and  ship  brokers ;  to  facilitate  the  purchase 
and  sale  of  the  commodities  exchanged  in  commerce, 
there  are  banking  houses  that  buy  and  sell  bills  of  ex- 
change ;  and  to  minimize  the  financial  risks  of  ocean 
transportation,  there  are  companies  to  insure  both  car- 
goes and  ships.     Each  of  these  agencies  has  its  activities 


72       OCEAN   AND   INLAND   WATER  TRANSPORTATION 

carefully  organized;  and  the  organization  of  iiitci-nationid 
trade  is  so  detailed  and  complex,  that  it  can  be  only  hrietiy 
referred  to  in  this  volume. 

The  large  passenger  steaniHliip  conipaiiics  have  offices 
or  agents  in  all  large  cities,  and  the  adverti.scnicjits  in  the 
newspapers  and  magazines  keep  the  traveling  public  fully 
informed  regarding  the  transportation  facilities  afforded. 
The  companies  operating  freight  lines  do  not  advertise 
so  generally,  but  they  all  have  announcements  in  the  tech- 
nical shipi^ing  journals,  and  they  have  offices  and  solic- 
itors where  the  traffic  to  be  secured  w^arrants  the  solicita- 
tion of  ■  business.  Moreover,  there  are  firms  of  freight 
forwarders  through  whom  commodities  may  be  shipped  to 
all  sections  of  the  world,  and  through  whom  commodities 
from  all  foreign  countries  may  be  imported. 

The  freight  forwarder  takes  all  kinds  of  freight,  not 
only  from  the  seaport  of  ocean  shipment,  but  also  from 
any  interior  point,  and  delivers  the  goods  to  the  foreign 
seaboard  or  inland  city  of  destination.  As  an  importer, 
also,  his  services  cover  the  entire  transportation.  The 
arrangements  between  shippers  and  forwarders  are  vari- 
ous; the  most  frequent  contract  made  covers  a  single 
shipment;  but  oftentimes  manufacturers,  and  others  that 
are  exporting  regularly,  make  contracts  running  a  year 
or  more  wath  forwarders  to  handle  a  stipulated  amount 
of  cargo  weekly  or  monthly  at  agreed  rates.  Some,  but 
not  all,  forwarding  firms  operate  vessels  of  their  own 
over  certain  routes. 

Frequently  the  freight  forwarder  is  also  a  ship 
broker.  The  ship  broker  performs  a  service  of  great  im- 
portance.    As  Prof.  J.  Russell  Smith  says:  ^ 

Several  thousands  ot  ships  are  scattered  over  the  oceans  of  the 
commercial  world,  engaged  in  a  trafRc  that  is  supphed  by  hundreds 

'  "Organization  of  Ocean  Commerce,"  p.  11. 


THE   OCEAN   FREIGHT  SERVICE  73 

of  ports  in  all  climes  and  all  continents,  from  Greenland  to  New 
Zealand.  Every  day  scores,  or  even  hundreds,  of  these  independent 
vessels  are  seeking  freight  to  carry.  It  is  a  complicated  world  puzzle 
to  bring  together  the  ships  and  the  freight  so  that  the  one  may  be 
most  profitably  employed  and  the  other  most  economically  carried. 
The  work  is  done  by  the  ship  brokers  and  steamship  agents,  who 
receive  their  pay  in  the  form  of  a  commission  or  brokerage,  a 
percentage  on  the  transaction.  In  all  shipowning  countries  these 
firms  have  their  headquarters,  and  each  one  has  agents  and  "cor- 
respondents "  in  many  other  countries,  so  that  among  them  all 
they  make  a  complicated  web  that  reaches  to  all  cities  of  commercial 
importance.  The  whole  is  so  bound  together  by  telegraph  and 
cable  that,  like  a  spider's  web,  if  touched  by  anything  of  importance 
at  any  point  the  whole  structure  vibrates  with  the  news.  The  de- 
parture of  a  steamer  loaded  with  sugar  from  a  small  port  in  Java, 
or  ore  from  Chile,  is  reported  by  telegiaph  in  Europe  and  America. 
There  is  practically  a  complete  record  of  all  vessel  movements 
published  daily  by  Lloyds,  the  Great  British  firm  of  underwriters. 
The  men  engaged  in  world  commerce  have,  through  their  world 
telegraph,  a  world  community  of  information. 

In  handling  and  accounting  for  ocean  traffic,  and  in 
meeting  the  requirements  of  the  shipping  and  revenue 
hiws,  several  business  papers  are  regularly  made  out  by 
the  shipper  and  the  carrier.  Upon  delivering  his  goods 
to  the  ocean  carrier,  the  shipper  receives  a  receipt  for 
each  dray  load  or  boat  load  of  goods.  The  receipts  are 
later  exchanged  for  a  bill  of  lading,  stating  the  names  of 
the  consignor  and  the  consignee,  describing  the  goods, 
giving  their  weight  or  tonnage,  their  destination,  and  the 
rate  of  freight.  An  original  and  two  or  tliree  manifold 
copies  of  the  bill  of  lading  are  mad(%  one  being  retained 
by  the  shipper  as  his  receipt,  one  being  kept  by  the  captain 
of  the  vessel,  and  one  is  sent  to  tlie  consignee.  The  bill 
of  lading  is  negotiable. 

When  a  shipment  is  from  an  interior  city  to  a  for- 
eign country,  it  may  be  dis})atclied  on  a  through  bill  of 
lading  covering  the  rail  and  water  carriage.     The  rail- 


•5  i   <-;■(■  -< 


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i:)UHl.ICATK  KOR  WHARF. 

Receipt  pob  Freight  for  Oce.\n  Shipment. 


THE  OCEAN  FREIGHT  SERVICE 


75 


road  company  accepting  the  shipment  collects  the  freight 
charges  through  to  the  foreign  destination,  and  after  de- 
ducting the  rail  charges,  turns  over  the  remainder  of  the 
amoimt  collected  to  the  ocean  carrier  or  the  forwarding 
agent  responsible  for  the  delivery  of  the  goods  to  the 
foreign  consignee. 

The  exporter  must  prepare  an  invoice  of  the  goods  he 


pi&ti. 


VI, 


■oed. 


THE  COSMOPOLITAN  SHIPPING  COMPANY, 

COSMOPOLITAN     LINE. 

Offirc,  305  k  307  Wamul  Street. 

PETES  WSI:ET  k  SONS,  Seueral  Ageiits. 


Per  Steamer 


Received  of  

Full  name  of  Consignee  mnst  be  given  on  this  Duplicate. 


Krrri'-ing   Clerk. 


■Sliiii|M'r9i  nrc  r«-4|a<'«>t<>€l  («>  fill  up  fll«-  K<<tM'i|i(  hiiiI   nit]ilic»lr. 


Duplicate  for  Wharf  of  Receipt  for  Ocean  Shipment. 


is  shipping,  describing  the  several  articles  of  freight,  giv- 
ing the  prices  paid  by  the  purchaser  of  the  commodities, 
and  stating  to  whom  the  goods  are  consigned.  The  cor- 
rectness of  this  invoice  must  be  certified  to  by  the  resi- 
dent consul  from  the  country  to  which  the  freight  is  being 
shipped.  The  consular  invoice  is  sent  with  the  bill  of 
lading  to  the  foreign  consignee,  who  is  required  to  pre- 
sent the  bill  of  lading  and  the  certified  invoice  to  the  cus- 
7 


l6,000  Bus.  2  Red  Tf^.   Wheat 


INVOICE  OF 

SHIPPED  BY  GRAFTON  &  CO.,  Philadelphia,  u.s.  a. 

GRAIN 
Receivers,  Shippers   and    Exporters 


Shipped  per  S/S 

For  Account  and  risk  of-^ 


The  Bourse 

Laurentian  fny 


Glas^oiv 


New  Tt 


Freight       ^yjd.  per  60  lbs.  &  si            Insured     ^"'-  ^°-  "f  ^<"-(^  ^" 
. Sale Of^o^er  QtA,  iQos Contract  No 


16,000  Bus.  @,  goc. 

Freight  £166.  IJ.^ 
Sfo  S.   6.8 


£ijS.  0.0  @  4.83 


Documents 
with 
Drafts 


Bills  Lading     2  Setts  8,000  Bus.  dated  10/2^ 
Insurance         2     "   $6g.8o  Ctfs.  Nos.  ij66jo-ji 

rrfis  Weights  &  ^      " 
\^iis.  Inspection 


E.  &  O.  E. 


Philadelphia, - 


October  2jth,    igoS 


Invoice  of  an  Ocean  Shipment. 


$14,400 !  c 


$13,554  1 


THE  OCEAN   FREIGHT  SERVICE  77 

toms  officers  in  order  to  secure  possession  of  the  goods. 
The  invoice  is  for  the  information  of  the  Government, 
its  main  purpose  being  to  aid  in  valuing  imports  and  levy- 
ing tariff  duties. 

The  ship's  manifest  is  another  important  paper.  The 
manifest  contains  "  the  name  or  names  of  the  places  where 
the  goods  on  board  have  been  laden,  and  the  place  or 
places  to  which  they  are  respectively  destined;  ...  a 
particular  account  and  description  of  all  the  packages  on 
board,  with  the  marks  and  numbers  thereon,  the  goods 
contained  in  such  packages,  the  names  of  the  respective 
shippers  and  consignees,  as  far  as  such  particulars  are 
known  to  the  master  "  of  the  ship.  The  manifest  also 
states  the  name  of  the  vessel  and  its  master,  and  its  home 
port.^  Before  a  vessel  can  clear  from  an  American  to 
a  foreign  port,  a  copy  of  the  manifest  must  be  filed  with 
the  collector  of  the  port;  and  upon  entering  an  American 
port  the  manifest  must  be  filed  with  the  same  official; 
however,  coasting  vessels  plying  between  ports  situated 
within  the  same  customs  district  of  the  United  States 
need  not  file  a  manifest,  although  in  clearing  for  or  en- 
tering from  a  port  of  another  district  the  manifest  must 
be  submitted.  The  seaboard  of  the  United  States  is 
divided  into  four  large  districts.  The  coast  from  Maine 
to  Florida  constitutes  one  district,  the  Gulf  coast  west  of 
Florida  a  second  district,  the  Florida  coast  a  third,  and 
the  Pacific  seaboard  a  fourth. 

The  papers  used  in  the  ocean  freight  service,  and  the 
requirements  which  a  vessel  must  fulfill  upon  clearing  or 
entering  a  port,  are  concisely  described  in  the  following 
statement  prepared  by  Peter  "Wright  and  Sons,  Phila- 
delphia : 

"  The  carrier  issues  bills  of  lading  in  duplicate,  tripli- 

^  L.  De  Colonge.     "The  American  Encyclopsedia  of  Commerce." 


«V) 


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THE  OCEAN  FREIGHT  SERVICE  79 

cate,  or  quadruplicate,  as  shippers  may  require  for  each 
shipment  of  merchandise  taken  on  board;  such  bills  of 
lading  are  a  receipt  given  by  the  vessel  for  the  goods  ac- 
cepted, and  contain  a  promise  to  deliver  the  goods  at  the 
port  of  destination,  '  in  like  good  order  and  condition/ 
with,  of  course,  the  usual  exceptions,  such  as  dangers  of 
tlie  seas,  etc.  The  shippers  are  then  retjuired  to  have 
executed,  before  the  resident  consul  for  the  country  to 
which  the  goods  are  destined,  a  consular  invoice  certify- 
ing to  the  shipment,  its  value,  etc.  The  bill  of  lading, 
together  with  the  consular  invoice,  are  then  forwarded  to 
the  aonsignee  in  the  foreign  country,  either  direct  or 
through  a  bank,  depending  on  the  conditions  of  sale;  the 
production  by  the  consignee  in  the  foreign  country  of 
such  bill  of  lading,  with  consular  invoice,  certifies  to  the 
foreign  customs  authorities  in  regard  to  the  ownership  of 
the  merchandise,  and  enables  the  owner  to  secure  proper 
delivery  of  his  property. 

"  A  steamer,  on  clearing  from  a  United  States  port, 
must  present  at  the  customs  house  a  full  and  complete 
manifest,  giving  a  full  and  complete  list  of  each  shipment, 
marks  and  numbers,  if  any,  value  of  the  merchandise,  and 
destination.  This  manifest  is  certified  to  by  the  customs 
ofiicials,  and  returned  to  the  master  together  with  a 
'  clearance.^  The  clearance  paper  is  a  document  certify- 
ing that  the  steamer  has  complied  with  necessary  Gov- 
ernment formalities,  stating  the  number  of  men  in  the 
crew,  and  also  stating  that  the  ship  is  authorized  to  sail 
for  the  port  named. 

"  The  United  States  customs  officers  also  issue  a  hill 
of  health,  certifying  to  the  general  state  of  health  of  the 
port. 

"  Having  obtained  its  clearance  papers,  the  master  of 
the  vessel  must  then  report  to  the  consul  of  the  country 
under  whose  flag  the  ship  sails,  and  state  his  intention  of 


An.  135,  Customs  Kegs.,  1899  l»'.  No-  l*'8 

Sec.  4201,  ReT.  Slals.  DEPARTMENT  OF  COMMERCE  AND  LABOR 

(lid.    I2-l6-04-I5.ooi>)  BUREAU  OF  NAVIGATION 

Cije  Unitet)  States  of  9[mertca. 

CLEARANCE  OF  VESSEL  TO  A  FOREIGN  PORT. 


District  of 

Port  of^ 


Cbcsc  arc  to  certifv  all  wbom  it  doth  concern 

That . 

Master  or  Commander  of  the 


burden Tons^  or  thereabouts^  mounted  with. 

Guns^  navigated  with Men^ 

built,  and  bound  for 


having  on  board- 


hath  here  entered  and  cleared  his  said  vessel,  accord- 
ing to  law. 

43itlCn  under  our  hands  and  seals,  at  the  Custom    House  of 

,    this — — </ay    of . 


one  thousand  nine  hundred ,  and  in   the- 

year  of  the  Independence  of  the  United  States  of  America. 


Deputy  Naval  Officer.  Deputy  Collector. 

Clearance  of  a  Vessel  to  a  Foreign  Port. 


THE  OCEAN  FREIGHT  SERVICE  81 

sailing  for  the  designated  foreign  port.  The  consul  then 
returns  to  the  master  of  the  vessel  the  articles  and  register 
that  had  been  deposited  at  the  consulate  immediately  on 
a  vessel's  arrival  in  port.  The  articles  is  a  document 
containing  the  names  of  all  the  members  of  the  crew,  with 
notation  of  the  position  each  man  tills;  the  register  is  a 
document  issued  by  the  government  under  whose  flag  the 
vessel  sails,  describing  the  vessel,  her  dimensions,  capaci- 
ties, tonnages,  etc. 

"  Before  sailing,  the  master  of  the  vessel  must  also 
apply  to  the  consul  of  the  country  in  which  the  port  of 
destination  is  located,  and  secure  his  vise  of  the  manifest, 
clearance,  and  other  documents  issued  by  the  United 
States  customs  authorities.  The  consul  generally  issues 
a  certificate  as  to  the  accuracy  of  the  documents,  and  also 
issues  a  bill  of  health,  certifying  to  the  health  conditions  of 
the  port  of  departure. 

"  In  connection  with  the  foregoing  matter  of  report- 
ing a  sailing  to  the  resident  consul  of  the  country  wherein 
is  located  the  port  of  destination,  it  is  a  noticeable  fact 
that  the  more  progressive  countries,  such  as  England, 
Germany,  France,  Holland,  Japan,  Italy,  I^orway,  Swe- 
den, etc.,  require  very  little  formality,  while  the  coun- 
tries which  comprise  the  '  Latin  race,'  more  particularly 
Spanish  and  Portuguese,  and  countries  under  such  in- 
fluence, particularly  the  South  American  countries,  re- 
quire an  extraordinary  amomit  of  detail,  frequently  even 
more  than  is  enumerated  in  the  foregoing;  furthermore, 
such  documents  are  generally  required  to  be  executed  in 
the  language  of  the  foreign  country,  and  all  of  them  heavily 
laden  with  consular  indorsements,  official  seals,  etc.,  and 
we  are  told  that  any  slight  irregularity  in  such  documents 
on  presentation  at  the  foreign  port  of  discharge  is  pun- 
ishable by  heavy  fines.  Very  few,  and  in  some  instances 
none,   of  these  extravagant  formalities  are   required   at 


Int.  No.  l.iNO  Department  of  Commerce  and  Labor 

Art.  132.  Customs  Kcyulalions  of  1899  BUREAU  OF  NAVfGATiON 

COMMEJtCB  AND   LABOR  CIKCULAK    NO.   I  BUHiAU  OF  NAVIGATrON 

THE  UNITED  STATES  OF  AMERICA. 

BILL    OF    HEIALTH. 


Custom  Housc%  Port  of-^ 
Co  all  to  wftoiti  tbm  Presents  sball  come : 
^f)crcaj6f,  the 


of- J  of  which '. 

is  Master^  is  now  ready  to  depart  from  the  Port  of 

for ,  and  other 

-places  beyond  the  sea,  with 

persons,  including  the  Master  of  the  said  vessel: 

Wty  tl^tttfottf  by  these  presents,  do  make  known 
and  Certify  that  no  plague,  nor  any  other  dangerous  or 
contagious  disease  in  an  epidemic  form,  at  present 
exists  in  the  said  Port. 

GIVEN  under  our  hands  and  seals  of  office,  this 

day  of ,  igo — . 


Collector  of  Customs. 


Naval  Officer. 


Bill  of  Health. 


THE  OCEAN  FREIGHT  SERVICE  83 

the  consulates  of  the  more  progressive  countries  above 
enumerated,  the  principal  recpiirement  being  a  bill  of 
health,  the  United  States  customs  documents  sufficing  at 
the  discharging  port." 

In  the  purchase  and  sale  of  connnodities  exchanged 
in  international  trade,  hills  of  exchange  are  used  to  facili- 
tate the  settlement  of  accounts.  The  bill  of  exchange, 
however,  is  not  a  transportation  paper,  but  a  financial 
one,  "  directing  one  party  to  pay  a  sum  of  money  to 
another — either  the  person  who  gives  the  order,  or  some 
third  person — at  some  day  fixed  or  ascertainable."  ^  The 
form  and  functions  of  bills  of  exchange  may  be  studied 
at  length  in  books  dealing  with  the  law  and  practice  of 
commerce,  and  need  only  be  referred  to  here  in  passing. 

3.  The  ocean  transportation  service  begins  and  ends 
with  the  handling  of  the  freight  at  the  seaboard  termi- 
nals. The  transfer  of  cargo,  particularly  of  bulk  freight 
like  grain,  coal,  lumber,  and  bananas,  is  frequently  made 
wholly  or  in  part  directly  from  car  to  ship  or  ship  to 
car;  but  usually  it  is  more  economical  to  load  and  unload 
the  vessel  more  rapidly  than  this  direct  transfer  will  per- 
mit, and  the  cargoes  are  stored  for  a  time  on  piers  or  in 
warehouses.  In  the  case  of  mixed  cargoes  of  general 
merchandise  storage  is  usually  necessary  both  for  the  in- 
bound and  outbound  freight. 

The  tendency  is  to  provide  as  far  as  possible  for  the 
mechanical  handling  of  cargoes,  to  accomplish  the  three- 
fold purpose  of  reducing  labor  costs,  reducing  the  time  of 
detention  of  the  ship  in  port,  and  economizing  in  storage 
by  getting  goods  out  of  the  warehouses  as  quickly  as  pos- 
sible. The  mechanical  appliances  for  transferring  freight 
consist  of  hoisting  engines  aboard  the  ship,  and  of  cranes 
and  derricks  on  the  piers  and  wharves. 

1  L.  De  Colonge.     Ibid. 


84       OCEAN   AND   INLAND   WATER  TRANSPORTATION 

In  discussing  the  handling  of  freight,^  Professor 
Smith  divides  freight-handling  machinery  into  two 
classes:  (1)  machinery  for  handling  general  miscella- 
neous cargo,  and  (2)  special  types  of  machinery  for  par- 
ti-cnlnr  kinds  of  heavy  articles  moved  in  bulk  cargoes  or 
large  ({uantitics.  The  first  of  these  two  types  of  trans- 
ferring machinery  includes  hoth  ship  and  pier  apparatus 
— the  winches  or  donkey  engines  on  shipboard,  and  the 
derricks  and  cranes  on  the  wharf  or  pier.  The  ship's 
machinery  is  useful  in  getting  general  cargo  into  and  out 
of  all  parts  of  the  hold  of  the  ship,  and  is  used  to  advan- 
tage in  loading  and  discharging  cargo,  when  the  transfer 
is  only  from  barge  or  quay  to  the  ship,  or  from  the  ves- 
sel to  the  barges  or  quay.  For  raising  and  lowering 
heavy  articles,  and  for  transferring  packages  to  and  from 
points  beyond  the  reach  of  the  ship's  derricks,  a  derrick 
or  moving  crane  operating  upon  the  land  is  necessary. 
In  many  European  ports  the  quays  are  equipped  with 
capstans,  cranes,  and  derricks  operated  with  power, 
usually  hydraulic,  supplied  from  a  central  plant.  This 
centralized  organization  of  the  facilities  for  handling  gen- 
eral cargo  has  not  been  carried  out  extensively  in  the 
United  States,  where  for  the  most  part  each  large  carrier 
equips  and  operates  his  owm  piers  and  wharves. 

For  handling  grain,  coal,  ores,  and  similar  commodi- 
ties that  are  shipped  in  large  bulk,  special  types  of  machin- 
ery have  been  provided  at  most  large  ports,  those  in  the 
United  States  being  somewhat  ahead  of  those  in  other 
countries.  From  the  time  the  wheat  is  delivered  by  the 
farmers  at  the  small  local  elevator  until  it  is  converted 
into  flour  in  the  large  milling  centers  of  the  United  States 
or  of  Europe  the  grain  is  handled  entirely  by  machinery; 
cars   and   vessels   being  loaded   and   unloaded,    elevators 

>  "Organization  of  Ocean  Commerce,"  Chapter  XIV. 


THE  OCEAN  FREIGHT  SERVICE  85 

filled  and  emptied,  by  mechanical  appliances.  There  are 
two  methods  of  loading  wheat  into  the  ocean  vessel:  one 
being  to  bring  the  ship  alongside  an  elevator  and  chute 
the  grain  into  the  ship  bv  gravity;  another  being  to  take 
the  grain  from  cars,  or  elevator,  to  the  vessel  in  float- 
ing elevators.  The  latter  method  is  the  one  followed 
in  New  York,  and  has  the  advantage  of  allowing  the 
vessel  to  lie  alongside  its  own  pier  and  take  on  gen- 
eral cargo,  while  grain  is  being  placed  into  the  hold  by 
a  floating  elevator  on  the  side  of  the  vessel  opposite 
the  pier. 

There  are  three  general  methods  of  handling  coal  or 
ore.  When  possible,  the  coal  and  ore  are  brought  by 
cars  to  the  Great  Lakes,  or  the  seaboard,  and  are  dumped 
through  the  bottom  of  the  cars  into  the  "  pockets  "  of  a 
high  pier,  and  are  run  from  the  pockets  into  the  vessel 
by  gravity.  Another  method  much  employed  in  loading 
coal  into  vessels  is  to  elevate  the  car  and  its  load  and 
dump  the  coal  into  chutes  leading  to  the  bunkers  or  hold 
of  the  vessel.  Electric  cranes  carrying  bucket  loads  of 
five  tons,  more  or  less,  are  much  used  to  unload  ore  and 
coal  at  the  lake  and  ocean  ports.  The  buckets  are  often 
carried  to  and  from  the  vessels  under  steel  cantalevers 
several  hundred  feet  long.  This  enables  coal  and  ore  to 
be  stored  in  dumps  or  loaded  into  cars  some  distance  from 
the  ship. 

Among  the  highly  useful  port  facilities  are  the  numer- 
ous specialized  warehouses  for  grain,  fruit,  meat,  tobacco, 
and  various  other  commodities.  In  the  great  European 
ports  these  various  warehouses  are  supplied  and  managed 
by  the  port  authorities,  and  regular  charges  for  the  serv- 
ices are  collected.  This  policy  has  been  a  great  aid  to 
the  development  of  trade.  In  the  United  States  the 
warehousing  service  is  usually  performed  by  the  shipper 
or  carrier.     The  European  system  enables  the  small  ship- 


86       OCEAN   AND   INLAND  WATER  TRANSPORTATION 

per  and  carrier  to  engage  in  business  more  easily  than 
he  can  in  the  United  States. 

As  far  as  possible  the  railroad  and  the  vessels  are 
brought  side  by  side,  and  cargo  is  transfcriTMl  niccliaii- 
ically  from  one  carrier  to  the  other.  In  |)ractice,  how- 
ever, a  large  amount  of  storing  and  warehousing  is  neces- 
sary, and  also  a  large  amount  of  lightering,  trucking,  and 
carting  of  goods  is  unavoidable.  In  the  London  docks 
three  fourths  of  the  cargo  of  the  vessels  is  loaded  and 
unloaded  from  lighters.  In  New  York  harbor  there  are 
ten  thousand  lighters.  The  lighters  carry  the  cargoes 
from  one  part  of  the  port  to  another,  from  the  shipper 
to  the  ship,  or  the  reverse,  or  from  one  ship  or  warehouse 
to  another  vessel  or  quay.  A  surprisingly  large  amount 
of  this  transfer  work  is  done  by  drays  and  wagons,  for 
which  special  loading  and  unloading  machinery  is  often 
provided.  The  dray,  however,  is  used  most  largely  for 
handling  freight  between  the  quays  and  the  warehouses, 
stores,  and  factories  of  the  merchants  and  manufacturers 
doing  business  in  and  near  the  seaports. 

REFERENCES  FOR  FURTHER  READING 

Smith,   J.   H.   "The  Organization  of  Ocean  Commerce."     1905. 

Chapters  II,  III,  and  XIV. 
"  The  Foreign  Commerce  and  Navigation  of  the  United  States." 

Bureau  of  Statistics,  Department  of  Commerce  and  Labot. 

(These  annual  volumes  contain  the  statistics  of  our  foreign 

trade,  and  give  a  yearly  review  of  the  foreign  commerce  of 

the  United  States.) 


CHAPTER    YI 


THE    PASSENGER    SERVICE 


The  ocean  passenger  service  receives  more  attention 
and  current  discussion  than  the  freight  service  does,  not 
only  because  evervone  is  more  concerned  about  the  per- 
sonal comfort  and  safety  of  himself  and  his  friends  than 
he  is  about  the  conditions  affecting  the  transportation  of 
his  property,  but  also  because  the  passenger  service  is 
conducted  in  vessels  whose  speed  and  equipment  are  much 
advertised  by  the  many  steamship  companies.  Ocean 
travel,  moreover,  is  a  favored  theme  with  the  popular 
magazines  and  their  contributors.  For  these  reasons  the 
main  facts  regarding  the  ocean  passenger  service  are 
rather  widely  known,  and  an  extended  statement  will  not 
be  necessary  in  this  treatise.  The  forces  controlling  ocean 
passenger  fares  will  be  discussed  in  a  later  chapter. 

Though  the  ocean  passenger  service  is  of  less  impor- 
tance than  the  freight  traffic  in  the  economy  of  society, 
the  service  of  carrying  passengers  and  the  mails  has  had 
a  greater  influence  than  the  freight  business  has  exerted 
upon  marine  engineering  and  upon  the  introduction  of 
technical  improvements  in  ships.  The  great  desideratum 
in  the  freight  service  is  economy  and  safety;  in  the  trans- 
})ortation  of  passengers,  speed  and  safety;  and  as  between 
economy  and  speed,  it  is  to  the  latter  that  inventors  have 
given  greater  study. 

Invention  has  accomplished  great  results  in  increasing 
the  speed  of  ocean  steamers,  and  in  enhancing  the  com- 

87 


88       OCEAN  AND  INLAND   WATER  TRANSPORTATION 

forts  and  safety  of  ocean  travel.  During  the  past  fifty 
years  the  time  of  ])assage  across  the  North  Atlantic  has 
been  reduced  one  half,  and  nearly  as  great  a  reduction 
has  been  made  on  the  other  important  ocean  routes.  The 
comforts  and  conveniences  now  obtainable  aboard  the 
best  steamers  are  incomparably  superior  to  those  provided 
a  generation  ago.  Ocean  travel  still  has  its  risks;  but  the 
ship  500  to  700  feet  in  length  and  65  to  75  feet  in  breadth, 
with  twin  screws,  numerous  water-tight  bulkheads,  and  a 
double  steel  bottom,  has  greatly  reduced  the  dangers  of 
the  sea  voyage.  Every  year  sees  some  new  feature  added 
to  the  equipment  of  the  ocean  liner,  despite  the  fact  that 
electricity,  elevators,  ice  machines,  cold  storage,  and 
numerous  other  auxiliaries  have  already  made  the  ocean 
vessel  a  great  floating  hotel.  The  future  will  doubtless 
greatly  improve  upon  present  facilities;  indeed,  the  tur- 
bine engine,  the  introduction  of  which  is  just  beginning, 
promises  not  only  to  increase  appreciably  the  speed  of 
ocean  vessels,  but  also  to  reduce  the  unpleasant  jarring 
motion  of  the  ship  caused  by  the  powerful  reciprocating 
engines  now  employed  to  secure  high  speed. 

The  technical  development  of  the  ocean  passenger 
service  has  been  the  cause  and  consequence  of  the  rapid 
increase  in  the  volume  of  ocean  travel.  Since  1880,  the 
annual  number  of  Americans  taking  cabin  passage  abroad 
has  more  than  trebled,  and  the  number  of  immigrants 
entering  the  United  States  each  year  has  more  than 
doubled.  In  1904,  the  cabin  passengers  departing  from 
the  seaports  of  the  United  States  numbered  184,613;  the 
number  of  "  passengers  other  than  cabin  "  was  323,591, 
making  a  total  of  508,204.  The  arriving  cabin  passen- 
gers numbered  175,818,  and  the  immigrants  812,870, 
making  a  total  of  988,688  arrivals.  In  1905  the  tide  of 
immigration  rose  even  higher,  and  over  a  million  steerage 
passengers — 1,026,499 — were  admitted.     The  total  num- 


90       OCEAN   AND  INLAND   WATER  TRANSPORTATION 

ber  of  inbound  passengers  in  1905  was  1,194,648.  The 
number  of  passengers  departing  from  the  United  States 
that  year  was  536,151,  making  the  total  jiassenger  traffic 
of  1905,  1,730,799. 

.  The  third-chiss  or  steerage  passengers  far  outnumber 
those  who  travel  in  the  first  and  second  cabins.  The 
steerage  business  is  also  more  profital)le  to  tlie  steamship 
company.  The  steerage  passenger  pays  a  low  rate  of  about 
one  third  the  average  fare  charged  the  first  and  second 
class,  but  his  accommodations  occupy  little  space,  and  the 
c()m])any  s])ends  relatively  little  on  his  table  and  his  state- 
r(jom.  The  large  passenger  steamer  can  readily  carry  four 
or  five  steerage  passengers  for  each  person  in  the  cabins, 
and  the  steerage  expenses  will  be  much  less  than  the  cabin 
expenses.  The  steerage  traffic  is  so  profitable  that  the 
steamship  lines  between  Europe  and  the  United  States 
compete  keenly  for  this  business,  and  the  low  fares  and 
comparatively  comfortable  accommodations  given  the 
third  class  induce  great  numbers  of  poor  people  to  migrate, 
that  would  prefer  to  remain  in  their  native  land  if  the 
dangers  and  discomforts  of  travel  were  greater.  The  serv- 
ice of  transporting  emigrants  from  the  interior  of  Europe 
to  America  and  elsewhere  is  highly  organized  by  the  steam- 
ship companies  and  by  other  agencies,  and  the  ease  and 
cheapness  of  the  steerage  passage,  as  well  as  the  allure- 
ments of  life  in  a  new  country,  steadily  swell  the  volume 
of  ocean  travel. 

The  number  of  persons  taking  trips  abroad  is  greatly 
increased  by  the  numerous  tourist  agencies.  The  agencies 
relieve  the  traveler  of  the  business  details  of  travel,  secure 
him  hotel  accommodations,  furnish  him  with  international 
banking  facilities,  and  supply  him  with  couriers,  guides, 
and  interpreters  in  all  countries.  The  educational  value 
of  foreign  travel  is  enhanced  by  "  bureaus  "  that  direct  the 
preparatory  reading  of  tourists  and  supply  them  en  route 


THE  PASSENGER   SERVICE  91 

with  educated  conductors  who  lecture  on  the  art  and  his- 
tory of  the  countries  and  cities  visited.  Formerly  people 
traveled  abroad  from  love  of  adventure,  or  because  of 
imperative  business  reasons;  now,  the  chief  motives  of  the 
ocean  cabin  passenger  are  recreation  and  education.  With 
the  increase  in  the  number  of  people  having  leisure  and  a 
surplus  income,  with  the  spread  of  education  among  all 
classes  of  society,  with  the  ever-growing  ease  of  ocean 
travel,  the  greater  will  be  the  number  of  persons  that  seek 


Immigrant  Station,  Ellis  Island,  New  York  Harbor. 

to  satisfy  the  travel  longing — the  Reiselust — that  possesses 
in  greater  or  less  measure  the  soul  of  every  man. 

For  handling  passenger  traffic  at  the  ports,  separate 
arrangements  are  necessarily  provided  for  cabin  and  steer- 
age passengers.  For  sanitary  and  other  reasons,  the  Gov- 
ernment inspects  steerage  passengers  more  rigidly  than 
those  who  take  cabin  passage,  the  laws  regarding  immi- 
grants into  the  United  States  being  particularly  compre- 
hensive and  exacting.  On  arriving  at  New  York,  a  pas- 
senger steamer  stops  first  in  the  lower  bay  and  is  boarded 
by  the  State  health  officers.  If  the  report  of  the  ship's 
physician  regarding  the  passengers  is  satisfactory,  and  if 
the  inspection  of  the  crew  reveals  no  contagious  or  infec- 


92       OCEAN  AND   INLAND  WATER  TRANSPORTATION 

tious  disease,  the  sliip  jji-oceeds  to  its  company's  pier  and 
discharges  its  cabin  passengers  and  the  mails,  if  it  is  a  mail 
steamer,  after  which  the  vessel  proceeds  to  the  immigrant 
station  on  Ellis  Island,  where  all  steerage  passengers  must 
land.  Each  immigrant  is  there  inspected  by  officers  of  the 
United  States  Bnreau  of  Immigration.  If  the  immigrant 
meets  all  the  requirements  of  the  law  as  regards  health 
and  ability  to  support  himself,  and  is  not  a  criminal,  an 
anarchist,  or  a  laborer  imported  under  contract,  he  is  al- 
lowed to  land  and  proceed  to  his  destination.  If  the  immi- 
grant is  denied  entry  into  the  United  States  the  steamship 
company  that  brought  him  to  our  shores  must  return  him 
without  cost  to  the  port  from  which  he  sailed. 

The  ocean  passenger  traffic  through  the  port  of  New 
York  exceeds  that  of  any  other  port  of  the  world;  but  the 
arrangements  provided  for  cabin  passengers  are  not  so  con- 
venient as  those  to  be  found  in  numerous  other  ports,  such 
as  Southampton,  England,  where  one  may  pass  directly 
from  steamer  to  train,  and  from  train  to  steamer;  or  such 
as  Liverpool,  where  all  passenger  steamers  ship  and  dis- 
charge their  passengers  at  a  common  "  landing  stage  "  cen- 
trally located. 

Certain  marked  tendencies  are  noticeable  in  the  de- 
velopment of  the  ocean  passenger  service.  It  has  been 
the  custom  of  all  ocean  lines  to  divide  passengers  into  three 
well-defined  classes.  In  this  regard  the  ocean  passenger 
business  has  followed  the  practice  of  the  European  railway 
passenger  service  rather  than  the  service  on  American  rail- 
roads. Although  classification  is  carried  out  to  some  ex- 
tent in  railroad  passenger  traffic  in  the  United  States,  trav- 
elers do  not  divide  themselves  into  such  distinct  classes  as 
they  do  in  Europe.  In  the  United  States  the  great  ma- 
jority of  people  travel  l)v  what  is  called  first  class,  which 
in  reality  corresponds  with  the  second  class  in  Europe, 
where  most  people  patronize  the  third  class,  which  cor- 


I 


o 


o 
a 
IS 


94       OCEAN   AND   INLAND   WATER  TRANSPORTATION 

responds  to  the  second  class  in  the  United  States — a  class 
that  is  used  so  infrequently  that  many  peoi^le  in  our  coun- 
try are  ignorant  of  its  existence. 

The  ordinary  ocean  liner  carries  many  more  first-class 
than  second-cahin  passengers,  and  usually  has  more  persons 
in  the  third  class  or  steerage  than  in  either  of  the  cabins. 
The  number  of  steerage  passengers  is  largest  on  the  Xorth 
Atlantic  and  on  the  west-bound  trip  across  the  Atlantic. 


The  Turbine  Engines  of  the  Carmania. 


Until  recent  years  steamship  companies  have  given  most 
attention  to  improving  the  accommodations  afforded  the 
first-class  passengers,  and  but  little  attention  has  been  given 
to  making  the  second  and  tliird  classes  attractive  and  com- 
fortable. During  the  past  few  years,  however,  particu- 
larly at  the  present  time,  some  of  the  large  steamship  com- 
panies on  the  Xorth  xVtlantic  are  doing  as  much  to  improve 
the  second  and  third  classes  as  thev  are  the  first  class.     The 


Cross-section  of  the  Carmania. 


OG       OCEAN   AND   INLAND   WATER  TRANSPORTATION 

largest  profits  now  come  from  the  traffic  below  second 
class,  and  the  steamship  companies  have  discovered  that 
the  volume  of  low-class  traffic  may  be  largely  increased. 

A  recent  statement  issued  by  the  Cunard  Steamship 
■Com])iiny  in  advertising  the  Caronia,  a  ship  of  twenty 
thousand  tons  gross,  put  into  service  in  1905,  may  be  cited 
to  illustrate  the  policy  of  one  of  the  companies  that  is 
making  special  efforts  to  develop  third-class  traffic.  "  For 
some  years  past,"  the  company  states,  "  the  business  of  the 
Atlantic  ferry  has  been  changing  in  character.  There  has 
been  a  growing  demand  for  second-class  accommodation. 


Arrangement  of  the  Engines,  Shafts,  and  Pkopellers  of  the 

Carmania. 


Luxurious  travel  for  those  who  can  afford  to  pay  high 
prices,  very  unluxurious  travel  for  those  whose  means  run 
only  to  steerage  fares,  with  a  somewhat  timid  and  indiffer- 
ent concession  to  the  intermediate  clientele,  will  no  longer 
meet  the  case.  Like  the  railway  companies  ashore,  so  the 
steamship  companies  afloat  have  discovered  that  it  is  to 
their  interest  to  cultivate  the  second-  and  third-class  pas- 
senger "  traffic. 

Li  the  Caronia  and  its  sister  ship,  the  Carmania,  the 
second-class  passengers  are  given  accommodations  but 
slightly  less  comfortable  than  those  provided  the  first  class. 
However,  it  is  in  the  third  class  that  the  most  important 


THE   PASSENGER  SERVICE 


97 


step  has  been  taken.  The  Cunard  Company  has  recog- 
nized the  fact  that  "  there  is  a  large  class  of  steerage 
passengers  who  are  not  emigrants,  and  that  this  traffic  is 
capable  of  great  expansion."  To  accommodate  the  steer- 
age passengers  who  are  not  emigrants  in  such  a  way  as 
to  make  the  voyage  attractive  to  them,  the  Cnnard  Com- 
pany has  divided  the  steerage  into  two  classes,  one  class 
being  for   the   emigrants,   and   a  higher  class  being  for 


One   of   the    Carmania's   Propeller 
Shafts. 


steerage  passengers  who  are  not  emigrants.  Accommoda- 
tion is  provided  for  one  thousand  emigrants  and  one 
thousand  third-class  passengers.  The  third-class  passen- 
gers may  engage  reserved  berths  in  staterooms.  Their 
accommodations  are  provided  with  bathrooms  and  with  a 
separate  dining  saloon,  and  their  quarters  are  equipped 
with  electric  fans  to  provide  adequate  ventilation. 

The  competition  of  ocean  steamship  companies  with 


98       OCEAN   AND  INLAND   WATER  TRANSPORTATION 

each  other  to  secure  the  passenger  traffic  has  resulted — as 
has  been  true  with  interrailway  competition  in  the  United 
States — in  the  development  of  a  faster  and  more  luxurious 
service,  but  has  not  brought  about  a  decrease  in  the  fares 
charged  for  the  first  and  second  classes.  European  rail- 
ways have  long  since  recognized  that  the  greater  profits 
were  to  be  obtained  by  making  attractive  the  service  pro- 
vided for  passengers  traveling  in  classes  below  the  second, 
and  foreign  railway  companies  have  catered  to  the  lower 
classes  of  trafiic  with  the  result  that  there  has  been  an 
enormous  increase  in  the  persons  traveling  in  the  third 
and  lower  class.  The  ocean  steamship  lines  are  apparently 
adopting  the  policy  of  the  European  railway  companies, 
by  catering  to  the  lower  classes  of  traffic,  where  there  are 
the  greatest  possibilities  of  increasing  the  volume  of  busi- 
ness. The  general  adoption  of  this  policy  by  ocean  steam- 
ship companies  will  doubtless  have  the  same  effect  that 
the  policy  has  had  in  the  railway  passenger  traffic,  where 
the  trend  of  traffic  has  been  from  the  upper  to  the  lower 
classes. 

REFERENCE    FOR    FURTHER    READING 

"The  Statistical  Abstract  of  the  United  States, "  prepared  by  the 
Bureau  of  Statistics,  Department  of  Commerce  and  Labor. 
(This  annual  publication  gives  the  figures  regarding  ocean 
passenger  travel  and  immigration.) 


CHAPTER    VII 


THE    OCEAN    MAIL    SERVICE 


During  the  year  ending  June  30,  1905,  there  were 
12,684,821  pounds  (6,342  tons)  of  mail  dispatched  by  sea 
from  the  United  States,  and  it  is  probable  that  the  weight 
of  incoming  mail  matter  was  nearly  as  much.  About  one 
fourth  of  our  outbound  over-sea  mail  went  to  three  coun- 
tries— Great  Britain,  Germany,  and  France — and  over 
half  of  the  total  went  to  European  countries.  It  is  esti- 
mated that  the  number  of  pieces  of  mail  matter  sent  and 
received  in  the  foreign  mails  (including  those  carried  by 
rail  to  and  from  Canada  and  Mexico)  during  the  fiscal 
year  1905  was  441,774,494.  The  rapidity  of  the  growth 
of  the  foreign-mail  service  may  be  indicated  by  comparing 
the  figures  just  given  with  those  for  1890,  when  the  weight 
of  mail  matter  dispatched  over-sea  was  but  4,330,073 
pounds,  and  the  total  number  of  pieces  in  our  inbound 
and  outbound  foreign  mails  was  191,413,760. 

The  total  cost  of  transporting  our  foreign  mails  to  other 
countries  during  1905  was  $2,899,005.  We  paid  foreign 
governments  about  one  fifth  of  a  million  dollars  for  for- 
warding our  mails  within  their  countries,  and  received 
from  other  countries  nearly  the  same  amount  for  carrying 
inbound  foreign  mails  across  our  country,  or  to  interior 
points  of  destination  within  the  United  States.  The  actual 
cost  of  our  foreign  mail  service,  exclusive  of  the  cost  of 
transporting  our  outbound  mail  from  interior  points  to  the 
seaboard  post  ofiices,  was  slightly  over  two  and  one  half 

99 


100     OCIOAX   AND   INLAND  WATER  TRANSPORTATION 

million  dollars  ($2,670,798.43)  during  the  fiscal  year 
1905. 

These  expenses  are  more  than  covered  by  the  postage 
received.  According  to  the  report  of  the  Postmaster-Gen- 
eral for  1905,  "it  is  estimated  that  the  sum  of  $6,219,- 
299.25  was  received  hy  this  de])artni('nt  as  |)()stag(!  on  ar- 
ticles exchanged  with  all  foi-eign  count I'ics,  and  that  of 
that  sum  the  jwstage  collected  on  the  articles  exchanged 
with  countries  other  than  Canada  and  Mexico  amounted 
to  $4,711,215.03,  or  $2,040,416.60  more  than  the  net 
cost  of  the  service;  ...  so  that  it  may  be  safely  assumed 
that,  even  after  adding  the  expense  of  transporting  the 
articles  between  the  United  States  exchange  offices  and 
the  offices  of  mailing  or  delivery  in  this  country,  of  which 
this  office  has  no  data  uj)on  which  to  base  an  intelligent 
estimate,  the  postage  collected  in  the  United  States  largely 
exceeds  the  gross  expense  incurred  by  this  department  in 
connection  with  the  mails  exchanged  with  foreign  coun- 
tries." 

The  United  States  pays  the  steamship  companies  that 
carry  the  ocean  mails  in  one  of  two  ways:  (1)  by  a  contract 
based  upon  the  length  of  the  route  and  speed  of  the  vessel, 
and  (2)  by  a  payment  based  upon  the  amount  of  postage 
received  by  tlie  United  States  from  the  mail  carried. 

The  contract  service  is  based  upon  the  law  passed  by 
Congress,  March  3,  1891,  which  empowers  the  Postmaster- 
General  to  make  contracts  running  from  five  to  ten  years 
for  the  carriage  of  the  mails  upon  steamers  of  American 
register,  officered  by  Americans,  and  manned  by  a  crew  at 
least  one  half  of  whom,  after  the  first  five  years  of  the 
contract,  must  be  composed  of  American  citizens.  Steam- 
ers are  divided  into  four  classes:  those  in  the  first  class 
must  be  iron  or  steel  ships  of  not  less  than  8,000  tons 
gross  register,  and  capable  of  maintaining  at  least  20  knots 
speed;  the  second  class  consists  of  iron  or  steel  steamers 


THE  OCEAN  MAIL  SERVICE  101 

of  not  less  than  5,000  tons  gross  register  and  16  knots 
speed;  the  third  class  of  iron  or  steel  steamships  of  at  least 
2,500  tons  and  14  knots;  and  the  fourth  class  of  iron,  steel, 
or  wooden  steamers  of  1,500  tons  or  more  and  12  knots 
speed.  Steamers  of  the  first,  second,  and  third  classes  must 
he  so  constructed  as  to  l)e  convertible  into  auxiliary  naval 
cruisers  and  they  may  be  taken  over  by  the  United  States 
for  transports  or  cruisers  upon  payment  of  a  fair  value  to 
the  owners.  Each  vessel  of  all  four  classes  is  recpiircd 
to  "  take,  as  cadets  or  apjjrentices,  one  American-born  boy 
under  twenty-one  years  of  age  for  each  one  thousand  tons 
gross  register,  and  one  for  each  majority  fraction  thereof, 
who  shall  be  educated  in  the  duties  of  seamanship,  rank  as 
petty  officers,  and  receive  such  pay  for  their  services  as 
may  be  reasonable."  Ships  of  the  first  class  may  receive, 
for  carrying  the  mails,  four  dollars  a  mile,  "  by  the  shortest 
practicable  route,  for  each  outward  voyage."  Ships  of 
the  second  class  may  receive  two  dollars  a  mile  for  the 
outward  voyage;  ships  of  the  third  class,  one  dollar  a  mile; 
and  of  the  fourth  class,  two  thirds  of  a  dollar  "  for  the 
actual  number  of  miles  required  by  the  Post-Office  De- 
partment to  be  traveled  on  each  outward-bound  voyage." 
The  payment  does  not  depend  upon  the  weight  of  mail 
carried,  but  upon  distance  and  speed. 

For  some  years  past  seven  contracts  under  the  above 
law  have  been  in  force;  and  during  1905  the  United  States 
paid  $1,431,620  to  the  contracting  companies.  The  larg- 
est contract  is  with  the  American  Line  of  the  International 
]\rercantile  Marine  Company  for  a  weekly  service  from 
Xew  York  to  Southampton,  for  which  the  United  States 
paid  $662,688  in  1905.  For  this  service  ships  only  of  the 
first  class  are  eligible.  The  second  largest  contract  is  with 
the  Oceanic  Steamship  Company  to  carry  the  mails  from 
San  Francisco  via  Honolulu,  Pago  Pago  (Samoa),  and 
Auckland  (New  Zealand)  to  Sydney,  Australia;  the  com- 


102     OCEAN   AND   INLAND  WATER  TRANSPORTATION 

pensation  for  this  service  in  1905  being  $299,862.  In  this 
service  the  vessels  are  of  the  second  class,  for  which  the 
payment  is  two  dollars  a  mile.  The  other  contracts  cover 
the  transportation  of  the  mails  to  Cuba,  Mexico,  Jamaica, 
and  Venezuela. 

When  an  American  steamer  carries  the  foreign  mails 
of  the  United  States  without  a  special  contract,  the  pay- 
ment for  the  service  equals  the  entire  amount  of  the  post- 
age; but  a  foreign  vessel  receives  only  a  fraction  of  the 
postage.  Stated  specifically,  "  steamers  flying  the  flag  of 
the  United  States,  but  not  under  contract,  are  allowed  for 
their  services  all  the  postage  collected  on  the  mails  they 
carry  from  this  country;  that  is  to  say,  five  cents  a  half 
ounce — $1.60  a  pound  (or  $3,200  a  short  ton) — for  letters 
and  post  cards;  and  one  cent  for  two  ounces — eight  cents 
a  pound  (or  $160  a  short  ton) — for  other  articles.  In  the 
case  of  a  steamer  conveying  the  mails  under  a  foreign  flag, 
compensation  for  the  service  is  allowed  at  the  rate  of  44 
cents  a  pound  (or  $880  a  short  ton)  for  letters  and  post 
cards,  and  44  cents  a  pound  (or  $90  a  short  ton)  for  other 
articles,  calculated  on  the  actual  net  weight  of  the  mails 
conveyed."  ^ 

In  addition  to  the  payments  made  for  carrying  ocean 
mails  under  the  two  services  just  explained — the  "  con- 
tract "  and  "  noncontract  "  services — there  are  certain 
other  expenses  for  the  transportation  of  our  foreign  mails : 
(1)  The  United  States  paid  in  1905  to  the  Governments  of 
France,  the  Netherlands,  the  Bahamas,  British  Honduras, 
and  Japan,  in  the  aggregate  $65,440  "  for  the  conveyance 
of  United  States  mails  and  foreign  closed  mails  by  steamers 
subsidized  by  said  governments."  (2)  The  Panama  Rail- 
road Company  received  $35,786  in  1905  for  carrying  mail 
from  Colon  to  Panama.  (3)  The  steamboat  transfer  serv- 
ice in   New  York  harbor   cost   $38,000.     (4)    Sea   post 

1  "  Report  of  the  Post-Office  Department,"  1904,  pp.  465,  466. 


THE  OCEAN   MAIL  SERVICE  103 

offices  were  maintained  on  thirteen  fast  steamers  of  four 
North  Atlantic  lines — the  North  German  Lloyd,  Ham- 
burg-American, the  International  Mercantile  Marine,  and 
the  White  Star  companies. 

The  sea  post  offices  and  the  transfer  service  in  New 
York  greatly  expedite  the  delivery  of  our  incoming  mails, 
and  reduce  the  amount  of  sorting  to  be  done  at  the  New 
York  post  office.  During  the  trip  across  the  ocean  the 
clerks  in  charge  of  the  sea  post  offices  sort  the  mail  and 
sack  it  with  reference  to  the  main  distributing  centers  in 
the  United  States.  AVhen  the  ocean  steamer  reaches  the 
quarantine  station  in  lower  New  York  Bay,  it  is  met  by  a 
special  mail  steamer  of  the  transfer  service,  "  which  re- 
ceives the  mails  and  conveys  them  as  rapidly  as  possible  to 
the  various  wharves,  when  the  mails  for  the  city  of  New 
York  are  immediately  sent  to  the  post  office  in  that  city, 
and  those  for  inland  destinations  are  forwarded  by  the  first 
outgoing  trains." 

The  United  States  Government  has  entered  into  nu- 
merous international  agreements  providing  for  sending 
parcels  through  the  foreign  mails.  Parcels  up  to  3  feet 
G  inches  in  length  and  up  to  .4  pounds  6  ounces  (2  kilo- 
grams) in  weight  may  be  sent  to  or  received  from  Ger- 
many, Belgium,  Norway,  Japan,  and  Hongkong.  Our 
other  parcels-post  agreements  permit  the  shipment  of  pack- 
ages Aveighing  11  pounds  (5  kilograms).^  During  the  year 
ending  June  30,  1905,  the  mail  matter  dispatched  from  the 
United  States  by  the  parcels  post  weighed  560,228  pounds. 
Four  years  earlier  the  weight  was  but  138,198  pounds. 

'  The  countries  and  sections  covered  by  our  parcels-post  agreements, 
in  1905  were  the  Bahamas,  Barbados,  Colombia,  Costa  Rica,  the 
Danish  West  Indies,  British  Honduras,  Jamaica,  Leeward  Islands, 
Mexico,  Salvador,  British  Guiana,  Windward  Islands,  Newfoundland, 
Honduras,  Trinidad,  Chile,  Germany,  Guatemala,  Nicaragua.  New 
Zealand,  Venezuela,  Bolivia,  Hongkong,  Japan,  Norway,  Belgium, 
Australia,  Panama  Canal  Zone,  and  Guam. 


104     OCEAN   AND   INLAND   WATER  TRANSPORTATION 

The  wciglit  of  parcels  received  into  the  United  States  from 
f(^reign  countries  in  1905  was  2.j2,773;  tliis,  however,  is 
less  than  the  weight  of  the  packages  received  in  1901,  the 
first  year  for  which  a  record  was  kept;  the  reason  for  this 
being  that  our  former  arrangement  with  Germany — the 
country  from  which  we  receive  most  parcels — permitted 
the  exchange  of  packages  weighing  11  pounds  (5  kilo- 
grams), whereas  at  the  present  time  the  maximum  weight 
for  Germany  and  the  United  States  is  2  kilograms  (4 
pounds  6  ounces).  The  average  weight  of  the  parcels  re- 
ceived and  sent  by  us  through  the  parcels  post  in  1905  was 
3^  pounds,  and  the  average  for  the  parcels  dispatched  was 
a  little  over  3  pounds. 

As  the  recent  annual  reports  of  the  United  States  Sup- 
erintendent of  Foreign  Mails  have  well  stated,  "  the  par- 
cels post  affords  the  only  channel  for  the  legitimate  ex- 
change of  packages  of  miscellaneous  merchandise  by  mail 
between  difierent  countries.  It,  in  fact,  gives  to  persons 
in  different  countries  substantially  the  same  facilities  for 
the  exchange  of  small  parcels  as  is  afforded  in  our  domes- 
tic mail  by  the  provision  for  the  admission  to  the  mails  of 
fourth-class  matter."  The  international  parcels  post  con- 
stitutes a  useful  addition  to  our  postal  facilities,  and  the 
development  of  this  branch  of  the  postal  service  would  be 
a  public  benefit. 

The  development  of  the  international  postal  service 
has  been  aided  by  the  Universal  Postal  Union  that  was 
established  by  a  treaty,  called  the  Universal  Postal  Con- 
vention, concluded  at  Berne,  Switzerland,  October  9,  1874. 
Nearly  all  the  governments  in  the  world  are  members  of 
this  union,  and,  in  the  ease  of  most  countries,  the  postage 
on  sealed  letters  is  five  cents  per  half  ounce,  with  a  two- 
cent  rate  for  post  cards,  and  a  half  cent  an  ounce  for 
printed  matter.  Throughout  most  parts  of  the  British 
Empire  the  letter  rate  is  one  penny,  or  two  cents.      The 


THE  OCEAN  MAIL  SERVICE  105 

postal  rates  between  the  United  States  and  its  noncontigu- 
ous jjossessions  is  the  same  as  the  rate  within  the  United 
States.  Our  domestic  postal  rates  also  aj^pl}'  to  mails  sent 
to  Canada,  Mexico,  and  Cuba. 

The  Universal  Postal  Union  maintains  at  Berne  a  cen- 
tral ofhce,  called  the  International  Bureau.  This  bureau 
is  in  charge  of  a  director,  and  is  under  the  supervision  of 
the  Swiss  Postal  Administration.  The  expenses  of  the 
bureau  are  borne  by  the  governments  that  are  members 
of  the  union.  "  That  bureau  is  charged  with  the  duty  of 
collecting,  collating,  publishing,  and  distributing  informa- 
tion of  every  kind  which  concerns  the  international  postal 
service;  of  giving,  at  the  request  of  the  postal  administra- 
tions concerned,  an  opinion  upon  questions  in  dispute;  of 
making  known  propositions  for  modifying  the  acts  of  the 
Congress  (the  Universal  Postal  Congress) ;  of  giving  notice 
of  the  changes  adopted;  and,  in  general,  of  undertaking 
such  researches  and  labors  as  may  be  intrusted  to  it  in 
the  interest  of  the  Postal  Union."  ^ 

The  Universal  Postal  Congress,  composed  of  delegates 
from  the  governments  belonging  to  the  Universal  Postal 
Union,  convenes  once  in  five  years,  its  last  session  con- 
vened in  April,  1906,  at  Eome,  Italy.  It  is  the  legis- 
lative body  that  controls  the  policy  of  the  union,  and  de- 
cides upon  the  rules  and  regulations  to  be  observed  by 
the  members  of  the  union  in  the  management  of  their 
foreign-mail  service. 

The  ocean-mail  service  has  had  a  stimulating  influence 
upon  the  development  of  ocean  transportation  generally. 
As  with  the  passenger  traffic,  so  with  the  carriage  of  the 
mails,  speed  is  necessary,  and  steamship  companies,  in 
order  to  secure  tlie  liberal  payments  which  governments 
are  willing  to  make  for  a  fast  mail  service,  have  steadily 
sought   to   reduce   the   time  required   for  ocean  transit. 

1  "Report  of  the  Post-Office  Department,  1904,"  pp.  461,  462. 


106     OCEAN    AND   INLAND   WATER  TRANSPORTATION 

Moreover,  in  making  contracts  with  steamship  compani/i£ 
for  the  carriage  of  the  foreign  mails,  most  governments 
include  with  the  transportation  of  the  mails  various  re- 
quirements as  to  frequency  and  speed  of  the  service,  and 
•  sometimes  there  are  requirements  regarding  the  passen- 
ger and  freight  accommodations  to  be  afforded  by  the  mail 
steamers.  For  these  services  intended  to  aid  commerce 
the  Government  often  remunerates  the  carrier  by  liberal 
payment  for  carrying  the  mails.  Ship  subsidies  not  infre- 
quently take  the  form  of  mail  payments;  the  Government 
requiring  the  vessels  that  carry  the  mail  to  be  of  home 
registry,  to  be  built  in  domestic  shipyards,  and  officered 
and  manned  in  whole  or  in  ])art  by  citizens  of  the  contract- 
ing country. 

In  the  subsequent  discussion  of  Government  aid  to 
shipping,  the  policy  of  the  United  States  and  other  coun- 
tries will  be  considered,  and  the  discussion  will  show  that 
the  payments  for  the  carriage  of  the  ocean  mails  have  been 
influential  in  developing  the  ocean  transportation  facilities 
of  several  countries. 


REFERENCES  FOR  FURTHER  READING 

"Annual  Report  of  the  Post-Office  Department."  (The  annual 
reports  of  the  Superintendent  of  Foreign  Mails  to  the  Post- 
master-General contain  a  good  account  of  the  ocean-mail 
service.) 

"The  Na\'igation  Laws  of  the  United  States,"  published  by  the 
Bureau  of  Na\'igation,  Department  of  Commerce  and  Labor. 
(This  gives  the  laws  relating  to  the  ocean-mail  service.  A 
revised  edition  appears  every  few  years.) 


CHAPTEK    VIII 

THE    INTERNATIONAL    EXPRESS    SERVICE 

A  SMALL  but  increasing  volume  of  international  traffic 
consists  of  express  matter,  including  parcels  of  relatively 
high  value  as  compared  with  their  weight,  papers  and 
documents,  printed  matter  too  heavy  for  transmission  by 
mail,  paper  money  and  coin,  and,  in  general,  such  articles 
as  require  especially  rapid  and  safe  transportation  and  a 
prompter  delivery  than  can  be  secured  by  means  of  the 
freight  service. 

The  line  separating  freight  from  express  traffic  is  not 
a  sharp  one,  but  the  charges  on  foreign  express  matter  are 
necessarily  so  high  as  practically  to  confine  international 
express  to  parcels.  The  boundary  between  freight  and 
express  is  more  definite  in  international  traffic  than  in  do- 
mestic traffic  by  rail,  where  commodities  ordinarily  shipped 
as  freight  may  be  sent  as  express  whenever  their  prompt 
delivery  is  especially  important. 

The  companies  that  conduct  a  foreign  express  service 
also  carry  on  an  international  banking  business  to  some 
extent,  by  selling  travelers'  checks  that  can  be  cashed  in 
any  one  of  a  large  number  of  foreign  cities.  These  checks 
are  purchased  in  increasing  numbers  by  tourists,  some  per- 
sons preferring  the  checks  to  the  customary  letter  of  credit. 

Three  companies  in  the  United  States  now  conduct  a 

foreign  express  service:  the  American  Express  Company, 

the  United  States  Express  Company,  and  Wells,  Fargo 

and  Company.     The  express  service  between  the  United 

9  107 


108     OCEAN    AND   INLAND   WATER  TRANSPORTATION 

States  and  Kur<»|)c  was  organized  soon  after  the  inaugura- 
tion of  the  (lonic'stic  express  business  in  the  United  States. 
William  Ilarnden,  about  1839,  first  organi/x'd  the  express 
service  in  the  United  States,  and  within  a  shoi't  time  started 
a  service  between  the  Tniited  States  and  Euroj)e,  probably 
because,  in  1840,  Alvin  Adams  began  competing  for  the 
domestic  express  business.  Harnden  found  the  foreign 
business  j)rofitable,  and  gave  it  more  attention  than  the 
domestic  business,  wdiich  Adams  steadily  enlarged.  In 
1854,  Harnden  and  Company  and  Adams  and  Company 
consolidated  with  two  other  firms  and  formed  the  Adams 
Express  C\)mpany. 

The  American  Express  Company  was  formed  in  1850, 
by  the  combination  of  two  existing  firms,  and  became  an 
active  competitor  of  the  Adams  Company.  However,  the 
express  business  in  the  United  States  came  to  be  controlled 
by  a  few  large  companies  that  were  easily  able  to  restrain 
competition  by  dividing  the  field  or  by  agreeing  upon  com- 
mon rates  for  like  services.  The  Adams  Express  Company 
withdrew  from  the  international  business,  leaving  the  ex- 
l)ress  trafiic  with  Europe  to  the  American  and  United 
States  Express  companies.  The  transpacific  traffic  is  car- 
ried on  mainly  by  Wells,  Fargo  and  Company. 

There  are  no  statistics  published  of  the  domestic  or 
foreign  express  traffic  handled  annually  by  American  com- 
panies. The  American  Express  Company  has  the  largest 
traffic  of  the  three  main  companies  doing  a  foreign  busi- 
ness, and  is  apparently  giving  more  attention  than  are 
the  other  companies  to  the  development  of  the  interna- 
tional traffic.  This  is  indicated  by  the  fact  that  the 
American  Express  Company  recently  entered  into  a  ]iar- 
cels-jmst  agreement  with  the  British  Government.  Pack- 
ages accepted  by  the  British  Post  Office  for  delivery  by 
parcels  post  in  the  United  States  are  consigned  to  the 
American  Express   Company  for  delivery;   likewise   the 


NEW  YORK  CITY  OFFICES  : 

(irii'l  Ollii'i'.  7-2   llroniliviiv,  iir.  Wall  SI. 
PKIXt  II'AIi  BitAXni  OFKICKS  : 

42  West  Broadway. 
32  Canal  Street. 
5  West  14th  Street. 
4.34  Broadway. 
SI  Columbus  Aveuue. 
275  West  12th  Street. 


READ   the:   coisiditioi 

COLUMBIAN 

72  Broadway, 


Value  asked  and given  as- 
Marked 


1 


Which  this  Company  undertakes  to  forward  to  the  nearest  point 

which  conditions  are  agreed  to  by  shi 

4.  This  Company  is  not  to  be  held  liable  for  any  loss  or  damage,  except  as  forwarder 
on  lyi  nor  for  any  lo.ss,damage,or  delay, by  the  dangers  of  navigation, by  the  aet  of  God  or  of  t  h 
eneinlesof  the  Government,  by  the  restraints  of  Government,  strikes,  mobs,  riots,  insurrc  ■ 
tions,  pirates,  or  from  or  by  reason  of  any  of  the  hazards  or  dangers  Incident  to  a  state  of  w;i  \ 

'2.  Nor  shall  this  Company  be  liable  for  any  default  or  negligence  of  any  person,  corpi'i^ 
tion  or  association  to  whom  the  said  property  sliall  or  may  be  delivered  by  this  Compain 
for  the  performance  of  any  aet  or  duty  in  respect  thereto,  at  any  place  or  point  off  the  e>tal 
lished  routes  or  lines  run  by  this  Company  ;  and  any  sucli  person,  corporation,  or  associati^  n; 
is  not  to  be  regarded,  deemed  or  taken  to  be  the  agent  of  this  Company  for  any  sue 
purpose,  but,  on  the  contrary,  such  person,  corporation  or  association  shall  be  deemed  am 
taken  to  be  the  agent  of  the  person,  corporation  or  association  from  whom  this  Compaii. 
received  the  said  property.  It  being  understood  that  this  Company  relies  upon  the  vari<>u 
Railroad  and  Steaniboat  lines  of  the  country  for  its  means  of  forwarding  property  deliv 
ered  to  it  to  be  forwarded,  it  is  agreed  that  it  shall  not  be  liable  for  any  loss  or  damage 
caused  by  the  detention  of  any  train  of  cars  or  of  any  steamboat  or  other  vehicle  iiiioi 
which  said  property  shall  be  iilac<-il  fur  transportation,  nor  by  the  neglect  or  refusal  of  an 
Railroad  Company,  Steamboat  "V  other  transportation  line  to  receive  and  forward  the  sai 
property.  Nor  shall  this  Company  be  liable  for  any  losses  or  damages  caused  by  detentioi 
of  said  property  due  to  Customs  Regulations. 

3'  It  is  fm-ther  agreed  that  property  covered  by  this  receipt  and  passing  over  oceai 
routes  in  transit  shall  be  subject  to  the  conditions  expressed  in  the  Bills  of  Lading  '< 
Ocean  Steamship  Companies  accepted  for  the  shipment. 

4.  It  is  further  agreed  that  this  Company  Is  not  to  be  held  liable  or  responsible  for  an 
loss  of,  or  damage  to,  said  property  or  any  part  thereof,  from  any  cause  whatever,  inile- 
in  every  case  the  said  loss  or  damage  be  proved  to  have  occurred  from  the  fraud  or  gr^ 


For  the  Com  par 


The  Liability  of  this  Company  is  limited  to  $50,  unless  the  just  and  true  > 

therefor,   based  upon  such  higher  value ;    and  such  liability  ce 

destination  it  can  carry  same.     Fragile  fabrics  and  fat 

ExPREt 


S     OF    THIS     REICEIIRT.         (21 2- Jan.,  1905 ) 


EXPRESS  COMPANY, 

ew  York, 190 


said  to  conta ill- 


Dollars, 


iesti  nation  reached  by  it,  subject  to  the  following  conditions,  and 
r  or  owner  in  accepting'  this  receipt. 

egligeiice  of  said  Compauy  or  its  servants ;  nor  in  any  event  shall  this  Company  be  held 
able  or  responsible,  nor  shall  any  demand  be  made  upon  it  beyond  the  sum  of  Fil'ry 
>ollar8,'  unless  the  just  and  true  value  thereof  is  stated  herein,  and  an  extra,  cliai-gc 
^  paid  or  agreed  to  be  paid  tlierel'or,  based  upon  such  bigber  value;  not'  upon 
_   property  or  tbiog  nuless  properly  packed  aud  secured  for  trausportation  ; 

or  upou  any  fragile  labries.orauy  fabrics  consist  iugol',or  contaiuediu,g:ln8s. 
•  5.  If  any  sum  of  money  besides  the  charges  for  transportation  is  to  be  collected  from  the 
onsignee  on  delivery  of  the  said  property,  and  the  same  is  not  paid,  or  if  in  any  case  the 
lonsignee  cannot  be  found  or  refuses  to  receive  such  property,  or  for  any  other  reason  it 
annot  be  delivered,  the  shipper  agrees  that  this  Company  may  return  said  property  to  him 
ubject  to  the  conditions  of  this  receipt,  and  that  he  will  pay  all  charges  for  transporta- 
ion,  and  tluu  tlie  liability  of  this  Company  for  such  property  while  in  its  possession  for 
he  purpose  of  making  such  collection,  shall  be  that  of  Warehousemen  only. 
I  6.  In  no  event  shall  this  Compauy  be  liable  for  any  loss,  damage  or  delay,  unices  the 
lalm  therefor  sliall  be  presented  to  it  in  writing  to  this  office  within  uinety  days  after 
ate  of  shijinient.  in  a  statement  to  which  this  receipt  shall  be  annexed. 

7.  It  is  further  agreed  that  any  carrier  or  party  liable  on  account  of  loss  or  damage  to 
ny  of  the  said  property,  shall  have  the  fulh  benefit  of  any  insurance  that  maj-  have 
■een  effected  upon  or  on  account  of  said  pro)jerty. 

I  S.  And  it  is  also  understood  that  the  stipulations  contained  herein  shall  extend  and 
lure  to  the  lienefitof  each  and  every  company  or  person  tn  wliom.  through  this  Company, 
he  said  property  may  be  entrusted  or  delivered  for  transporlatic.n. 

9.     Delivi^ries  at  destination  are  only  to  be  made  witliin  the  delivery  limits  established 
uch  points  at  the  time  of  shipment  and  prepayment  in  such  cases  shall  only  cover  places 
v-ithin  such  delivery  limits. 


.A-rent. 


e  is  stated  in  this  receipt  and  an  extra  charge  is  paid  or  agreed  to  be  paid 
^i  on  delivery  by  the  Company  of  property  at  nearest  point  to 
t  i  consisting  of,  or  contained  in  glass,  at  owner's  risk. 

il'iECEIPT. 


THE   INTERNATIONAL  EXPRESS  SERVICE  109 

American  Express  Company  employs  the  parcels  post  in 
the  United  Kingdom  to  deliver  packages  consigned  to 
points  in  that  comitry.  It  is  said  that  the  American  Ex- 
press Company  contemj)lates  making  contracts  of  a  sim- 
ilar character  with  other  European  countries;  miless,  as  is 
not  probable,  the  United  States  Post-Office  Department 
should  decide  to  enlarge  its  international  parcels-post  serv- 
ice by  making  agreements  with  more  countries  providing 
for  the  transportation  by  mail  of  packages  w'eighing  over 
four  pounds,  six  ounces. 

All  three  companies,  however,  have  the  same  general 
organization  of  their  foreign  service  and  follow  the  same 
business  methods.  The  foreign  department  of  an  express 
company  performs  the  services  of  an  international  for- 
warder; but  the  express  companies  in  the  United  States 
do  not  maintain  business  organizations  of  their  own  in 
foreign  countries  similar  to  the  organization  they  have  at 
home.  The  express  traffic  they  have  in  foreign  countries 
is  not  large  enough  to  require  this;  consequently  the  ex- 
press company  in  the  United  States  enters  into  reciprocal 
agreements  with  forwarding  agents  in  Europe  and  else- 
where. The  American  party  to  the  agreement  engages  to 
consign  to  its  foreign  agent  all  express  matter  which  the 
American  company  may  receive  destined  to  points  in  the 
territory  covered  by  the  operations  of  the  foreign  agent. 
Likewise,  the  foreign  party  to  the  contract  obligates  him- 
self to  forward  to  the  American  company  with  which  he 
lias  an  agreement  all  ex|)ress  he  may  receive  destined  for 
points  in  the  United  States,  and  not  otherwise  specifically 
consigned. 

The  express  com^jany  receiving  parcels  for  shipment 
abroad  gives  the  shipper  a  receipt  or  bill  of  lading.  In 
the  case  of  a  single  small  shipment  the  sliipi:>er  is  given  a 
receipt,  the  form  of  which  is  the  same  as  for  a  domestic 
shipment.     When  the   consignment   is   a   large   one   the 


110     OCEAN    AND   INLAND   WATER  TRANSPORTATION 

shipper  receives  a  freight  export  bill  of  hiduig  (lesci-iltiiig 
the  goods,  giving  the  name  of  the  sliipper  and  the  consignee, 
the  destination  of  the  goods,  weight  and  description  of  the 
articles,  and  the  rates  or  amount  of  agreed  through 
charges,  'i'lie  bill  of  lading  is  ordinarily  made  out  in 
trijilicate,  one  copy  being  given  to  the  sliipper,  one  retained 
by  the  express  company,  and  one  forwarded  to  the  exj)ress 
company's  foreign  correspondent  or  agent.  Tlie  exjiress 
com])any  nuikes  out  a  way  bill  covering  the  shipments  made 
by  the  steamship  upon  which  goods  are  sent  al)road.  Tliis 
is  the  express  company's  own  record,  and  descrilies  the 
articles,  states  the  origin  and  destination  of  the  goods  de- 
scribed, and  gives  the  weight,  freight  charges,  total,  ])re- 
paid,  and  to  be  collected.  The  express  company  receives 
from  the  steamship  company  the  customary  bill  of  lading 
describing  the  goods  shipped,  and  containing  the  contract 
between  the  exj^ress  company  and  the  steamship  company. 
The  bill  of  lading  issued  by  the  express  company  and 
forwarded  to  its  correspondent  or  agent  abroad  must  be 
accompanied  by  shippers'  invoices  or  manifests  stating  the 
value  of  the  goods,  so  that  the  foreign  agent  may  secure 
the  entry  of  the  commodities  at  the  customs  house. 

The  express  company  makes  no  special  contract  with 
the  steamship  company  for  the  transportation  of  express 
matter,  its  relations  with  the  ocean  carrier  being  like  those 
of  other  shippers.  In  this  regard  the  foreign  express  serv- 
ice differs  from  the  domestic.  In  the  domestic  business, 
the  express  company  makes  a  contract  with  a  railroad  com- 
pany whereby  the  express  company  is  granted  a  monopoly 
of  the  express  traffic  handled  over  that  railroad.  The  rail- 
road company  furnishes  the  requisite  cars  or  car  space  for 
transporting  the  express  matter,  and  hauls  the  cars,  and 
receives  for  this  service  from  forty  to  fifty  per  cent  of  the 
gross  receipts  obtained  by  the  express  company.  The 
express  company  collects,  dispatches,  and  delivers  the  pack- 


THE   INTERNATIONAL  EXPRESS   SERVICE  111 

ages,  employing  the  railroad,  bv  special  contract,  to  trans- 
port the  traffic. 

In  the  foreign-express  traffic,  on  the  contrary,  the  ex- 
press company  makes  an  agreement  with  the  ocean  carrier, 
as  other  shippers  do,  for  each  separate  voyage,  to  carry 
such  matter  as  may  be  offered  for  that  trip  at  the  rates 
charged  by  the  carrier  for  the  class  and  quantity  of  goods 
offered  for  shipment.  The  express  company  ships  its  for- 
eign traffic  by  the  steamer  and  line  that  may  have  the  first 
sailing,  instead  of  dispatching  its  packages  by  only  one  line 
of  vessels.  The  international  express  traffic  being  rela- 
tively small  in  volume  and  more  or  less  intermittent,  this 
plan  of  shipping  goods  without  a  special  contract  is  econom- 
ical and  satisfactory. 

The  foreign-express  service  has  a  competitor  in  the  in- 
ternational parcels  post,  described  in  the  previous  chapter. 
The  volume  of  traffic  now  carried  between  the  United 
States  and  foreign  countries  by  the  parcels  post  is  not 
large,  for  the  reason  that  there  are  only  a  few  countries 
with  which  we  have  a  large  exchange  of  mail  that  we  have 
thus  far  included  in  our  parcels-post  agreements.  More- 
over, in  our  agreements  with  several  of  the  more  impor- 
tant countries  we  have  restricted  the  weight  of  a  package 
that  may  be  sent  by  the  parcels  post  to  4  pounds  6  ounces 
(2  kilograms),  our  reason  for  this  restriction  being  the 
4-pound  limit  placed  upon  packages  that  may  be  mailed 
to  points  within  our  country. 

This  restriction  upon  the  weight  of  packages  that  may 
be  sent  through  the  domestic  and  foreign  mails  limits 
greatly  the  competition  of  the  mail  service  with  the  express 
business.  There  are  stronti,'  reasons  in  favor  of  enlaraing; 
the  scope  of  the  domestic-mail  service  in  the  United  States 
by  increasing  the  weight  of  packages  that  may  be  trans- 
mitted by  mail  up  to  a  limit  of  ten,  or  possibly  fifteen 
pounds. 


112     OCEAN   AND   INLAND   WATER  TRANSPORTATION 

The  arginnents  in  favor  of  the  estalilisliincnt  of  a  par- 
cels post  in  the  United  States  are  that  the  Government 
could  conduct  the  service  more  economically  than  express 
companies  can,  and  could  consequently  charge  lower  rates 
•than  now  prevail.  The  Government  has  post  offices  in  all 
parts  of  the  country,  and  numerous  branch  offices  in  dif- 
ferent sections  of  the  large  cities.  The  machinery  for  col- 
lection and  distribution  is  elaborate,  and  has  recently  been 
extended  to  include  many  rural  districts.  "■  The  Govern- 
ment would  need  only  to  enlarge  its  present  service,  which 
it  could  do  with  a  relatively  small  increase  of  expenses,  in 
order  to  include  all  the  traffic  in  small  packages  now 
handled  by  the  express  companies.  .  .  .  AVhether  or  not 
the  time  has  come  for  increasing  the  competition  of  the 
mail  with  the  express  business,  there  is  little  doubt  that 
the  post  office  could  handle  packages  up  to  ten  or  fifteen 
pounds  in  weight  without  loss  at  rates  much  lower  than 
those  now  charged  by  the  express  companies.  If  the  Gov- 
ernment's competition  were  extended,  the  rates  charged 
by  the  private  companies  w^ould  probably  be  lowered.  .  .  . 
The  express  business,  while  not  a  complete  monopoly,  is 
one  in  which  competition  is  confined  to  narrow  limits."  ^ 

While  the  international  express  business  is  not  so  com- 
pletely monopolistic  as  is  the  express  business  within  the 
United  States,  the  competition  among  companies  doing  a 
foreign  express  service  is  not  keen.  The  present  rates  are 
high,  and  a  large  development  of  international  express 
traffic  can  hardly  take  place  unless  lower  charges  are  pos- 
sible. Most  of  the  arguments  in  favor  of  domestic  parcels 
post  within  the  United  States  apply  to  the  establishment 
by  our  country  of  a  foreign  parcels  post  with  a  weight 
limit  of  at  least  11  pounds  (5  kilograms)  per  package.  By 
establishing  such  a  service  at  rates  that  would  cover  only 

*  See  pp.  166  and  167  of  the  author's  book  on  "American  Railway 
Transportation." 


THE   INTERNATIONAL   EXPRESS  SERVICE  113 

the  expenses  of  the  service,  the  United  States  could  facili- 
tate the  development  of  international  intercourse.  Such  a 
policy  on  the  part  of  the  United  States  would  limit  the  de- 
velopment, of  the  international  express  service  performed 
by  private  companies  in  the  United  States,  and  would 
doubtless  cause  these  companies  to  specialize  upon  the  per- 
formance of  services  other  than  the  transmission  of  pack- 
ages of  merchandise.  This  would  be  a  detriment  to  the 
private  express  company,  but  would  be  of  benefit  to  the 
people  of  the  United  States. 

EEFEREXCE  FOR  FURTHER  READING 

Johnson,  E.  R.  "American  Railway  Transportation."  Chapter  XI. 
(This  chapter  gives  an  account  of  the  express  ser\'ice  of  Ameri- 
can railways.) 


FREIGHT   EXPORT   BILL   OF   LADING. 

COLUMBIAN   EXPRESS   COMPANY. 


NEW  YORK,  72  Broadway. 
CHICAGO,  65  Monroe  St. 


ST.  LOUIS,  17  Norlh  Fourth  St. 
BOSTON,  431  Franklin  St. 


(B/L  No 

IRccciveD  at- 
jfiom 


Contract  No- 


the  following  property,  in  apparent  good  order,  except  as  noted  (contents  and  condition  of 
contents  of  packages  nnknown),  marked,  consigned  and  destined  as  indicated  below,  to  be 
NEW  YORK 


carried  to  the  Port  of   "  pQ^^"^*^    and  thence  by- 
[Scheduled  to  sail sailed 


-]   or  the  next  available  steamer 


(or  line)  and  to  be  delivered  in  like  order  and  condition  to  Port  of- 
unto 


-or  his  or  their  assigns  : 


(ARTICLES) 


NUMBERS  OR  ADDRESS  ON  GOODS 

SUBJECT  TO  CORRECTION 

MARKS, 

WEIGHT 

CUBICAL  MEAS'T 

VALUE 

FEET 

INCHES 

APPLY  for  delivery    to 

The  Agent  or  Correspondent  of  COLUMBIAN    EXPRESS    CO.,   named  above  will 

NOTIFY 

where  and  through  whom  final  delivery  of  goods  will  be  made. 


CHARGES 


\  Prepaid  by  Shipper  as  Below. 
/  Collect  of  Consignee  as  Below. 


FOR 

FROM 

TO 

@ 

P-R 

AMOUNT 

CARRIAGE 

CARRIAGE 

Marine  Insurance 
for  sum  of 


Prepaid. 
Collect. 


Tin  Wlttness  TKHbercof,  The  Agent  of  the  said  COLUMBIAN  EXPRESS  CO.,  hath  affirmed 

to Bills  of  Lading,  all  of  this  tenor  and  date,  one  of  which  being  accomplished  the 

others  stand  void. 


Dated  at- 


_day  of_ 


.Agent. 


Express  Company's  Export  Bill  of  Lading. 


116     OCEAxM   AND   INLAND   WATER   TRANSPORTATION 

In  consideration  of  the  Rate  of  Freigiit  herein  named,  it  is  hereby  stipulated 
that  the  service  to  be  performed  hereunder  shall  be  subject  to  the  conditions, 
whether  printed  or  written,  herein  contained,  and  said  conditions  are  hereby 
agreed  to  by  the  shipper  and  by  him  accepted  for  himself  and  his  assigns  as 
just  and  reasonable. 

COISIDITIOIMS: 

With  respect  to  the  service  UNTIL  DELIVERY  at  the  port  of  New  York  or 
Boston,  it  is  agreed  that: 

1.  No  carrier  or  party  in  possession  of  all  or  any  of  the  projjerty 
herein  described,  shall  be  liable  for  any  loss  thereof  or  damage  thereto, 
by  causes  beyond  its  control;  or  by  floods  or  by  fire;  or  by  quarantine; 
or  by  riots,  strikes  or  stoppage  of  labor;  or  by  leakage,  breakage,  chaf- 
ing, loss  in  weight,  changes  in  weather,  heat,  frost,  wet  or  decay;  or 
from  any  cause  if  it  be  necessary  or  is  usual  to  carry  such  property  upon 
open  cars. 

2.  No  carrier  is  bound  to  carry  said  property  by  any  particular  train 
or  vessel,  or  in  time  for  any  particular  market,  or  otherwi.se  than  with 
as  reasonable  despatch  as  its  general  business  will  permit.  Every  carrier 
shall  have  the  right,  in  case  of  necessity,  to  forward  said  property  by 
any  railroad  or  route  between  the  point  of  shipment  and  the  point  to 
which  the  rate  is  given. 

3.  No  carrier  shall  be  liable  for  loss  or  damage  not  occurring  on  its 
own  road  or  its  portion  of  the  through  route,  nor  after  said  property  is 
ready  for  deliverj'  to  the  next  carrier  or  to  consignee.  The  amount  oi 
any  loss  or  damage  for  which  any  carrier  becomes  liable  shall  be  com- 
puted at  the  value  of  the  property  at  the  place  and  time  of  shipment 
under  this  bill  of  lading,  unless  a  lower  value  has  been  agreed  upon  or 
is  determined  by  the  classification  upon  which  the  rate  is  based,  in 
either  of  which  events  such  lower  value  shall  be  the  maximum  price  to 
govern  such  computation.  Claims  for  loss  or  damage  must  be  made  in 
writing  to  the  agent  at  point  of  delivery  promptly  after  arrival  of  the 
property,  and  if  delayed  for  more  than  thirty  clays  after  the  delivery  of 
the  property,  or  after  due  time  for  the  delivery  thereof,  no  carrier  here- 
under shall  be  liable  in  any  event. 

4.  All  property  shall  be  subject  to  necessary  cooperage  and  baling 
at  owner's  cost.  Each  carrier  over  whose  route  Cotton  is  to  be  carried 
hereunder  shall  have  the  privilege,  at  its  own  cost,  of  compressing  the 
same  for  greater  convenience  in  handling  and  forwarding,  and  shall 
not  be  held  responsible  for  deviation  or  unavoidable  delays  in  procur- 
ing such  compression.  No  carrier  shall  be  liable  for  differences  in 
weights  or  for  shrinkage  of  any  grain  or  seed  carried  in  liulk. 

5.  Property  not  removed  by  the  person  or  party  entitled  to  receive 
it  within  twenty-four  hours  after  its  arrival  at  destination,  may  be  kept 
in  the  car,  depot  or  place  of  delivery  of  the  carrier,  at  the  sole  risk  of 
the  owner  of  said  property,  and  there  held  subject  to  lien  for  all  freight 
and  other  charges.  Property  taken  from  a  station  at  which  there  is  no 
regvilarly  appointed  agent,  shall  be  entirely  at  risk  of  owner  until  loaded 
into  cars;  and  when  received  from  private  or  other  sidings,  shall  be  at 
owner's  risk  until  the  cars  are  attached  to  trains. 


EXPRESS  COMPANY'S  EXPORT  BILL  OF  LADING     117 

6.  No  carrier  hereunder  will  carry,  or  be  liable  in  any  way  for  any 
documents,  specie,  or  for  any  article  of  extraordinary  value  not  specifi- 
cally rated  in  the  published  classifications,  unless  a  special  agreement 
to  do  so,  and  a  stipulated  value  of  the  articles  are  endorsed  hereon. 

7.  Every  party,  whether  principal  or  agent,  shipping  inflammable, 
explosive,  or  dangerous  goods,  without  previous  full  written  disclosure 
to  the  carrier  of  their  nature,  shall  be  liable  for  all  loss  or  damage 
caused  thereby,  and  such  goods  may  be  warehoused  at  owner's  risk  and 
expense  or  destroyed  without  compensation. 

8.  Any  alteration,  addition,  or  erasure  in  this  bill  of  lading  which 
shall  be  made  without  the  special  notation  hereon  of  the  agent  of  the 
carrier  issuing  this  bill  of  lading  shall  be  void. 

9.  If  upon  inspection  it  is  ascertained  that  the  articles  shipped  are 
not  those  described  in  this  bill  of  lading,  the  freight  charges  must  be 
paid  upon  the  articles  actually  shipped,  and  at  the  rates  and  under  the 
rules  provided  for  by  published  classifications. 

10.  If  all  or  any  part  of  said  property  is  carried  by  water  over  any 
part  of  said  route,  such  water  carriage  shall  be  performed  subject  to 
the  further  conditions  that  no  carrier  or  party  shall  be  liable  for  any 
loss  or  damage  resulting  from  the  perils  of  the  lakes,  sea  or  other 
waters;  or  from  explosion,  bursting  of  boilers,  breakage  of  shafts,  or 
any  latent  defect  in  hull,  machinery  or  appurtenances;  or  from  col- 
lision, stranding,  or  other  accidents  of  navigation;  or  from  the  prolonga- 
tion of  the  voyage.  And  any  vessel  carrying  any  or  all  of  the  property 
herein  descril:>ed  shall  have  liberty  to  call  at  intermediate  ports;  to  tow 
and  be  towed,  and  to  assist  vessels  in  distress,  and  to  deviate  for  the 
purpose  of  saving  life  or  property. 

IL  No  carrier  shall  be  liable  for  delay,  nor  in  any  other  respect  than 
as  warehousemen,  while  the  said  property  awaits  further  conveyance, 
and  in  case  the  whole  or  any  part  of  the  property  specified  herein  be 
prevented  by  any  cause  from  going  from  said  port  in  the  first  steamer, 
of  the  ocean  line  above  stated,  leaving  after  the  arrival  of  such  property 
at  said  port,  the  carrier  hereunder  then  in  possession  is  at  liberty  to 
forward  said  property  by  succeeding  steamer  of  said  line,  or,  if  deemed 
necessary,  by  any  other  steamer. 

12.  This  contract  is  executed  and  accomplished,  and  all  liability 
hereunder  terminates,  on  the  delivery  of  the  said  property  to  the  steam- 
ship, her  master,  agent  or  servants,  or  to  the  steamship  company,  or  on 
the  steamship  ])ier  at  the  said  jjort,  and  the  inland  freight  charges  shall 
be  a  first  lien,  due  and  jiayable  l)y  the  steamship  company. 

With  respect  to  the  service   AFTER  DELIVERY  at  the  port  of  NEW  YORK 
or  BOSTON,  it  is  Mutually  agreed  that: 

The  ship  shall  have  liberty  to  .sail  with  or  without  pilots;  that  the  Car- 
rier shall  have  liberty  to  convey  goods  in  craft  and  or  lighters  to  and 
from  the  ship  at  the  risk  of  the  owners  of  the  goods;  and,  in  case  the  ship 
shall  put  into  a  port  of  refuge,  or  be  j)revented  from  any  cause  from 
proceeding  in  the  ordinary  course  of  her  voyage,  to  transship  the  goods 
to  their  destination  by  any  other  steamship;  that  the  ship  and  Carrier 
shall  not  be  Liable  for  loss  or  damage  occasioned  by  perils  of  the  sea  or 
other  waters,  by  fire  from  any  cause  or  wheresoever  occurring;  by  barra- 
try of  the  master  or  crew;  by  enemies,  pirates,  robbers  or  thieves;  by 
arrest  and  restraint  of  princes,  rulers  or  people,  riots,  strikes  or  stoppage 


118     OCEAN  AND  INLAND  WATER  TRANSPORTATION 

of  labor,  by  explosion,  bursting  of  boilers,  breakage  of  shafts,  or  any 
latent  defect  in  hull,  machinery  or  appurtenances,  or  unseaworthiness  of 
the  ship,  whether  existing  at  time  of  shipment  or  at  the  beginning  of 
voyage,  provided  the  owners  have  exercised  due  diligence  to  make  the 
vessel  seaworthy;  by  heating,  frost,  decay,  putrefaction,  rust,  sweat, 
change  of  character,  drainage,  leakage,  breakage,  vermin,  or  by  explo- 
sion of  any  of  the  goods  whether  shijiped  with,  or  without,  disclosure  of 
their  nature,  or  any  loss  or  damage  arisii>g  from  the  nature  of  the  goods, 
or  the  insufficiency  of  packages;  nor  for  land  damage,  nor  for  the  oblit- 
eration, errors,  insufficiency  or  absence  of  marks,  numbers,  address  or 
description;  nor  for  risk  of  craft,  hulk  or  transshipment;  nor  for  any  loss 
or  damage  caused  by  the  prolongation  of  the  voyage,  and,  that  the 
Carrier  shall  not  be  concluded  as  to  correctness  of  statements  herein  cf 
(luality,  quantity,  gauge,  contents,  weight  and  value.  General  Average 
payable  according  to  York-Antwerp  Rules.  If  the  owner  of  the  vessel 
shall  have  exercised  due  diligence  to  make  said  vessel  in  all  respects  sea- 
worthy and  properly  manned,  equipped  and  supplied,  it  is  hereby  agreed 
that  in  case  of  disaster  resulting  from  fault  or  negligence  of  the  pilot, 
master  or  crew  in  the  navigation  or  management  of  the  ship,  or  from 
latent  or  other  defects,  or  unseaworthiness  of  the  vessel,  even  existing  at 
time  of  shipment,  or  at  the  beginning  of  the  voyage,  but  not  discoverable 
by  due  diligence,  the  consignees  or  owners  of  the  cargo  shall  not  be 
exempted  from  liability  for  contril)uti3n  in  General  Average,  or  for  any 
special  charges  incurred,  but,  with  the  shipowner,  shall  contribute  in  a 
General  Average,  and  shall  pay  such  special  charges,  as  if  such  danger, 
damage  or  disaster  had  not  resulted  from  such  fault,  negligence,  latent 
or  other  defects  or  unseaworthiness. 

IT  IS  ALSO  MUTUALLY  AGREED  that  this  shipment  is  subject  to 
all  the  terms  and  provisions  of,  and  all  the  exemptions  from  liability 
contained  in,  the  Act  of  Congress  of  the  United  States,  approved  on  the 
13th  dav  of  Februarv,  1893. 

I.  IT  IS  ALSO  MUTUALLY  AGREED  that  the  Carrier  shall  not  be 
liable  for  articles  specified  in  Section  4281  of  the  Revised  Statutes  of  the 
LTnited  States,  nor  for  any  package  exceeding  the  sum  of  $100  in  value, 
unless  notice  of  true  character  and  value  thereof  is  given  and  same  is 
entered  in  the  bill  of  lading. 

II.  ALSO,  that  Shippers  shall  be  liable  for  any  loss  or  damage  to  ship 
or  Cargo  caused  by  inflammable,  explosive  or  dangerous  goods,  shipped 
without  full  disclosure  of  their  natin-e,  whether  such  Shipper  be  Princi- 
pal or  agent,  and  such  goods  may  be  thrown  overboard  or  destroyed  at 
any  time  w^ithout  compensation. 

III.  ALSO,  that  the  Carrier  shall  have  a  lien  on  the  goods  for  all 
freights,  primages  and  charges,  and  also  for  all  fines  or  damages  which 
the  shi))  or  cargo  may  incur  or  suffer  by  reason  of  the  illegal,  incorrect 
or  insutlicient  marking,  numbering  or  addressing  of  packages  or  descrip- 

.  tion  of  their  contents.  Furthermore  all  charges  or  expenses  incurred 
through  non-compliance  with  Customs  Requirements  will  be  charged 
to  consignee.  The  shipper  hereby  further  expressly  agrees,  if  the  good.? 
are  not  accepted  by  consignee,  to  pay  the  carrier  all  freights,  primage, 
charges  and  Custom  expenditures;  and  in  case  such  goods  are  seized  or 
sold,  to  pay  the  said  Carrier  for  any  and  all  losses  resulting  by  reason 
thereof,  including  all  freight  and  other  charges. 

IV.  ALSO,  that  in  case  the  Ship  shall  be  prevented  from  reaching 
her  destination  bj'  Quarantine,  the  Carrier  maj-  discharge  the  goods  into 


EXPRESS  COMPANY'S  EXPORT  BILL  OF  LADING     119 

any  Depot  or  Lazaretto,  and  such  discharge  shall  be  deemed  a  final  deliv- 
ery under  this  contract,  and  all  the  expenses  thereby  incurred  on  the 
goods  shall  be  a  lien  thereon. 

V.  ALSO,  that  the  Ship  may  commence  discharge  immediately  on 
arrival,  and  discharge  continuously,  any  custom  of  the  port  to  the  con- 
trary notwithstanding,  the  Colloc  tor  of  the  Port  being  hereby  authorized 
to  grant  a  general  order  for  disrharge  immediately  on  arrival,  and  if 
the  goods  be  not  taken  from  the  ship  \)y  the  Consignee  directly  they  conui 
to  hand  in  discharging  the  ship  the  Master  or  ship's  Agent  to  be  at  lib- 
erty to  enter  and  land  the  goods,  or  put  them  into  craft  or  store  at  the 
owner's  risk  and  expense,  when  the  goods  shall  be  deemed  delivered 
and  the  ship's  responsibility  ended,  but  the  ship  and  Carrier  to  ha\('  a 
lien  on  such  goods,  until  the  payment  of  all  ( osts  and  charges  so  incurred. 

VI.  ALSO,  that  full  freight  is  payable  on  damaged  or  unsovmd  goods; 
but  no  freight  is  due  on  any  increase  in  bulk  or  Aveight  caused  by  the 
absorption  of  water  during  the  voyage. 

VII.  ALSO,  that  if  on  a  sale  of  the  goods  at  destination  for  freight 
and  charges,  the  proceeds  fail  to  cover  said  freight  and  charges,  the 
Carrier  shall  be  entitled  to  re(  over  the  dii'i'erence  from  the  shipper. 

VIII.  ALSO,  that  in  computing  the  amount  of  any  liability  of  carrier, 
ship  or  representatives  as  carrier,  l)ailee  or  otherwise,  hereunder  or  for 
or  in  respect  to  said  property  of  the  care,  carriage,  delivery  or  disposi- 
tion of  the  same  for  negligence  or  otherwise,  no  higher  value  shall  be 
placed  upon  said  property  than  the  market  price  at  the  port  of  destina- 
tion on  the  day  of  the  steamer's  entry  at  the  Custom  House,  but  in  no 
case  shall  it  be  more  than  the  invoice  cost  thereof  at  time  of  original 
shipping  or  value  herein  agreed  upon,  whichever  is  less,  and  in  no  event 
shall  carrier,  ship  or  representative  be  liable  for  any  profits  or  increase 
in  price  or  value  over  such  cost  or  agreed  value,  whichever  is  less,  or 
any  consequential  or  special  damages,  and  the  carrier  shall  always  have 
the  option  of  replacing  any  lost  or  damaged  goods.  All  claims  for  short 
delivery,  loss,  damage,  or  of  whatsoever  nature,  must  be  made  in  writ- 
ing to  the  carrier's  agent  at  the  port  of  destination  of  the  goods  at 
time  of  delivery  or  in  any  event  within  five  days  after  the  goods  arrive, 
and  in  case  such  claims  shall  not  be  presented  in  writing  within  the  time 
and  place  hereinbefore  designated,  such  loss  or  damage  shall  be  deemed 
to  be  waived  and  the  steamer  and  carrier  discharged  therefrom.  And 
in  no  case  shall  the  carrier  be  liable  for  any  loss  or  damage  arising  by 
reason  of  theft,  such  loss  or  damage  being  an  insurable  risk. 

IX.  ALSO,  that  merchandise  on  wharf  awaiting  shipment  or  delivery 
be  at  shipper's  risk  of  loss  or  damage  by  fire  and  or  flood,  not  happening 
through  the  fault  or  negligence  of  the  owner,  master,  agent  or  manager 
of  the  vessel,  any  custom  of  the  port  to  the  contrary  notwithstanding. 

X.  ALSO,  that  this  bill  of  lading,  duly  endorsed,  be  given  up  to  the 
Agent  of  the  Columbian  Express  Company  in  exchange  for  delivery  order. 

XL  ALSO,  that  the  Freight  prepaid  will  not  be  returned,  goods 
lost  or  not  lost. 

XII.  ALSO,  that  parcels  for  different  Consignees  collected  o"-  made 
up  in  single  packages  addressed  to  one  Consignee,  pay  full  freight  on 
each  parcel. 

XIII.  ALSO,  that  freight  payal)le  on  weight  is  to  be  paid  on  gross 
weight  landed  from  Ocean  Steamship,  imless  otherwise  agreed  to  or 
herein  otherwise  pro\'ided,  or  unless  the  Carrier  elects  to  take  the  freight 
on  the  Bill  of  Lading  weight. 


120      OCEAN  AND  INLAND  A\ATEK  TRANSPORTATION 

XIV.  ALSO,  if  the  cubical  measurement  of  goods  upon  remeasure- 
ment  should  exceed  that  given  in  margin  hereof,  or  error  is  made  in 
computing  charges  thereon,  the  Company  reserves  the  right  to  correct 
same  by  collecting  additional  charges. 

XV.  ALSO,  it  is  stipulated  that  in  case  the  whole  or  any  part  of  the 
articles  specified  herein  be  prevented  by  any  cause  from  going  iii  the 
first  steamship  leaving  after  the  arrival  of  such  articles  at  said  port,  the 
Carrier  is  only  bound  to  forward  them  by  succeeding  steamships  em- 
ployed in  this  line,  or  if  deemed  necessary  by  said  Carrier  it  may  forward 
them  in  other  steamshii)S. 

XVI.  ALSO,  that  the  property  covered  by  this  bill  of  lading  is  sub- 
ject to  all  conditions  expressed  in  the  regular  forms  of  bills  of  lading  in 
use  by  the  steamship  company  at  tinu;  of  shipment,  including  any 
special  written  or  stamped  conditions  noted  thereon  l)y  Steamship  Com- 
pany, and  to  all  local  rules  and  regulations  at  port  of  destination  not 
expressly  provided  for  hy  the  clauses  herein. 

XVII.  ALSO,  that  goods  may  be  baled  or  coopered,  if  necessary',  at 
expense  of  owners— costs  to  follow  goods. 

XVIII.  ALSO,  that  the  consignee  in  taking  delivery  of  goods  is  to 
see  that  the  marks  and  numbers  agree  with  those  given  hereon,  and  is 
to  carefully  examine  the  condition  of  packages  and  if  not  in  good  order 
or  packages  bear  evidence  of  pilferage  of  or  damage  to  contents,  deliv- 
ery should  only  be  taken  with  due  reservation. 

XIX.  Goods  which  may  be  required  to  be  forwarded  by  Rail, 
Steamer,  or  otherwise,  to  their  destination,  from  the  Ship's  Port  of 
Discharge,  shall  be  so  forwarded  at  Shipper's  risk,  and  carried  subject  to 
the  ordinary  Conditions  of  Carriage  of  the  Railway,  Steam,  or  other 
Carrier  employed,  or  subject  to  any  special  terms  required  by  them. 
All  liability  of  the  ship  and  o^^'ners  and  Columbian  Express  Co.  under  this 
bill  of  lading  to  cease  upon  delivery-  of  the  goods  to  the  succeeding  carrier. 

XX.  In  case  the  regular  steam_ship  service  to  final  port  of  delivery 
should  for  any  reason  be  suspended  or  interrupted,  the  carrier,  at  the 
option  of  the  owner  or  consignee  of  the  goods,  or  the  holder  of  the  Bill  of 
Lading,  may  forward  the  goods  to  the  nearest  available  port,  this  to  be 
considered  a  final  delivery;  or  to  store  them  at  any  port  at  the  risk  and 
expense  of  the  goods  until  regular  ser\ace  to  final  port  of  destination  is 
opened  again. 

XXI.  Freight  and  charges  payable  by  consignee  to  be  paid  at  current 
rate  of  exchange. 

XXII.  ALSO,  in  case  of  closing  of  port  of  destination  by  ice,  right 
is  reserved  to  unload  cargo  at  nearest  accessible  port.  Any  expense 
incurred  for  so  discharging  with  cost  for  carrying  to  destination  will  be 
at  risk  and  expense  of  consignee. 

XXIII.  MARINE  RISKS:  The  Columbian  Express  Company  wiU 
not  be  responsible  for  losses  arising  from  perils  of  the  sea  unless  Marine 
Insurance  is  imdertaken  by  the  Company. 

It  is  stipulated  that  any  claim,  demand  or  question,  arising  out  of 
this  shipment  and  bill  of  lading  shall  be  determined  according  to  the 
law  of  the  State  of  New  York. 

AND  FINALLY,  in  accepting  this  Bill  of  Lading,  the  Shipper, 
O^Tier  and  Consignee  of  the  goods  and  the  Holder  of  the  Bill  of  Lading 
agree  to  be  bound  by  all  its  stipulations,  exceptions  and  conditions, 
whether  written  or  printed,  as  fully  as  if  they  were  all  signed  by  such 
Shipper,  O'mier,  Consignee  or  Holder. 


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PART  III 

THE    OCEAN    CARRIERS    AND    THE    PUBLIC: 

THE   RELATIONS   OE   THE    CARRIERS 

WITH    ONE    ANOTHER    AND 

THE   PUBLIC 


10 


CHAPTER    IX 

OKGANIZATION    OF    OCEAN    TRANSPORTATION 

The  ocean  transportation  service  has  developed  from 
small  beginnings.  Ocean  commerce  was  long  carried  in 
small  sailing  vessels  usually  owned  by  the  shipper,  who 
might  be  an  individual  merchant  or  trading  company,  a 
planter,  a  fisherman  or  group  of  fishermen,  and  who  gen- 
erally operated  the  shii3  or  ships  as  single  units,  sending 
them  when  and  where  a  prospect  of  profitable  trading 
arose;  but  at  the  present  time  ocean  transportation  is  a 
service  of  great  magnitude,  performed  by  large  vessels, 
mainly  steamers,  operated  in  most  instances  by  large  com- 
panies that  usually  are  carriers  solely,  and  not  producers 
or  traders. 

The  typical  ocean  transportation  company  performs  a 
highly  organized  service,  and  operates  a  large  number  of 
ships  according  to  a  well-defined  plan.  However,  although 
the  vessel  owner  is  more  often  only  a  carrier,  and  not  a 
producer,  there  are  numerous  manufacturing  and  mining 
companies  that  operate  their  own  vessels;  and  during  the 
past  few  years  combinations  in  industry  and  the  develop- 
ment of  world  markets  have  been  accompanied  by  a  ten- 
dency on  the  part  of  the  producer  to  use  his  own  ships  to 
assemble  his  raw  materials  and  to  distribute  his  products. 
Similarly,  many  large  railway  systems,  especially  in  Great 
Britain  and  the  United  States,  have  supplemented  and  in- 
creased their  service  of  land  transportation  by  establisliing 
lines  of  vessels.     This  tendency  of  the  large  producer  and 

125 


126     OCEAN   AND   INLAND   WATER  TRANSPORTATION 

the  strong  railway  company  to  become  their  own  carriers 
by  sea  is,  in  a  sense,  a  return  to  the  earlier  organization  of 
ocean  commerce,  when  mercliants  and  producers  traded  l)y 
using  their  own  ships;  but  (iccaii  sliippiiig  is  to-day  a  coin- 
.plicated  business,  quite  unlike  llic  sim})k;  organization 
which  characterized  the  service  a  century  or  more  ago. 

AVhilc  tlu'  hirge  company  is  the  typical  ocean  carrier, 
the  individual  or  company  owning,  or  operating  upon  a 
lease,  one  or  a  few  ships  is  and  will  continue  to  be  an  im- 
portant factor  in  ocean  trans])ortation,  A  vessel  is  readily 
purcliased,  or  leased;  the  ocean  is  a  highway  free  to  all  who 
desire  to  use  it;  at  every  port  facilities  are  provided  where- 
by the  individual  who  owns  no  wharf  or  pier  may  dispatch 
or  discharge  cargoes;  and  as  these  conditions  will  always 
exist  the  large  company  can  exclude  the  small  carrier  only 
by  performing  all  the  services  desired  by  producers  and 
shippers,  and  by  doing  those  services  more  economically 
than  they  can  be  rendered  by  the  man  or  company  owning 
or  leasing  only  a  small  tonnage  of  vessels.  As  will  be  ex- 
plained presently,  there  are  certain  kinds  of  service  that 
the  large  carrier  can  perform  advantageously,  and  other 
services  which  the  small  carrier  can  render  more  satisfac- 
torily and  economically. 

To  explain  the  ocean  transportation  service — to  discuss 
the  economics  of  ocean  transportation — the  subject  re- 
quires consideration  in  three  different  aspects:  (1)  The  re- 
lations of  the  carriers  wdth  each  other;  (2)  the  relations  of 
the  carriers  with  the  public,  the  shippers,  and  travelers 
who  purchase  the  service;  and  (3)  the  relation  of  the  car- 
riers with  the  Government,  the  policy  and  practice  of  Gov- 
ernment aid,  and  regulation  of  the  service  of  ocean  trans- 
portation. 

In  dealing  wdth  the  relations  of  carriers  wdth  each 
other,  it  will  be  well,  first,  to  describe  briefly  the  evolution 
of  the  present  organization  of  the  service;  second,  to  ex- 


ORGANIZATION   OF   OCEAN   TRANSPORTATION       127 

plain  the  nature,  scope,  and  necessary  limitations  of  the 
competition  in  the  ocean  transportation  service ;  and,  third, 
to  give  an  account  of  the  agreements,  traffic  associations, 
pools,  and  consolidations  by  means  of  which  ocean  carriers 
have  sought  to  limit  competition  and  to  regulate  their  inter- 
relations. In  the  present  chapter  the  organization  of  the 
service  will  be  considered,  and  in  the  two  following  chap- 
ters the  nature  of  competition  and  efforts  to  regulate  com- 
petition will  be  discussed. 

The  ocean  carrier  in  the  early  stages  was  the  individual 
trader,  who  took  his  own  goods  and  those  of  his  neighbors 
over-sea  to  exchange  for  the  commodities,  usually  articles 
of  luxury,  and  the  precious  metals,  obtainable  in  foreign 
countries.  AVhen  the  trade  thus  became  of  some  volume 
or  gave  evidence  of  being  capable  of  large  development, 
trading  com})anies  were  formed,  such  as  the  British  and 
Dutch  East  India  companies,  which  frequently  received 
from  the  Government  chartering  them  the  exclusive  priv- 
ilege of  trading  with  the  foreign  territory  covered  by  the 
charter.  These  famous  companies,  like  the  individuals 
and  small  companies  of  their  time,  were  organizations 
formed  to  carry  on  trade,  and  ocean  transportation  was 
incidental  to  their  trading  business.  They  were  not  gen- 
eral carriers,  such  as  a  present-day  steamship  company  is. 

After  the  Dutch  lost  ISTew  Amsterdam,  in  1064,  the 
trading  company  had  no  place  in  the  commerce  of  the 
American  colonies,  which  was  handled  by  the  independent 
traders  of  Great  ]>ritain  and  the  American  colonies;  and 
was,  as  a  matter  of  fact,  dovelo])ed  maiidy  l)y  the  colonists 
themselves,  who,  as  fishermen,  merchants,  farmers,  and 
planters,  individually  operated  such  vessels  as  their  busi- 
ness required,  or  as  tlieir  instinct  for  foreign  ventures 
prompted.  Conducted  in  this  individual  and  unorganized 
manner,  the  over-sea  trade  of  the  colonies  grew  slowly,  l)ut 
more  or  less  steadily,  until  the  establishment  of  the  Na- 


128     OCEAN   AND   INLAND   WATER  TRANSPORTATION 

tional  Government  under  the  Constitution  made  possible 
the  rapid  expansion  of  the  maritime  activities  of  America. 
The  increasing-  trade  of  the  people  of  the  United  States 
brought  about  both  a  technical  improvement  in  shipping 
and  a  higher  degree  of  organization  in  the  service  of  ocean 
transportation. 

The  first  result  of  the  growth  of  the  foreign  trade  of  the 
United  States  during  the  latter  part  of  the  eighteenth  cen- 
tury and  the  early  years  of  the  nineteenth  was  to  develop 
the  great  merchant  trader,  such  as  Stephen  Girard,  of 
Philadelphia,  and  Elias  Hasket  Derby,  of  Salem,  Mass. 
Girard  was  active  in  commerce  from  1780  to  1812,  and 
lived  until  1831;  Derby  died  in  1799.  The  manner  of 
carrying  on  ocean  commerce  in  Derby's  time  is  well  de- 
scribed by  W.  L.  Marvin  in  his  book  on  "  The  American 
Merchant  Marine,"  in  the  foHowing  passage  (p.  198): 
"  Those  old  Salem  merchants  were  shipowners,  and  some- 
thing more.  They  did  not,  as  a  rule,  carry  freight  for 
others.  When  Mr.  Derby  or  Mr.  Gray  or  Mr.  Peabody 
built  a  ship  he  calculated  to  use  it  in  his  own  mercantile 
ventures.  He  would  furnish  it  with  an  outward  freight, 
and  the  sale  of  this  procured  a  homeward  cargo,  which 
the  merchant  would  dispose  of  from  his  own  warehouses. 
Mr.  Derby  owmed  about  forty  vessels,  and  the  largest  of 
them  made  forty-five  voyages  for  him  to  India  and  China. 
Most  of  his  enterprises  were  very  successful." 

The  ships  operated  by  Derby  and  the  other  merchant 
traders  of  his  day  were  small  sailing  vessels  of  300  tons 
and  less.  Such  vessels  could  readily  be  built  and  fitted  out 
with  crew  and  cargo,  by  an  individual  or  group  of  men 
with  but  a  small  amount  of  capital,  who  would  have  been 
unable  to  own  and  operate  a  number  of  vessels  and  to  en- 
gage in  the  carrying  service  as  distinct  from  the  business 
of  a  trader.  As  the  foreign  trade  of  the  United  States 
and  the  passenger  traffic  between  Europe  and  America  be- 


ORGANIZATION  OF  OCEAN   TRANSPORTATION        129 

came  large  and  of  fairly  constant  volume  ocean  transpor- 
tation came  to  be  a  business  increasingly  distinct  from  the 
business  of  the  merchant  or  trader,  and  lines  of  sailing 
vessels  were  put  into  service  by  companies  whose  sole  busi- 
ness was  the  ownership  and  operation  of  ships. 

According  to  Marvin,  the  first  line  of  sailing  vessels 
was  the  Black  Ball  Line,  which  began  running  between 
New  York  and  Liverpool  in  1816.  He  states  that  "  in 
1822  a  second  line  to  Liverpool  was  founded;  in  the  next 
year  a  third  line  to  Hull."  The  ships  of  these  "  packet  " 
lines,  as  they  were  called,  were  larger  than  the  ordinary 
merchant  vessel  of  their  time;  they  had  regular  sailing 
dates;  they  carried  the  mails,  the  cargoes  of  highest  value, 
and  the  steerage  and  cabin  passenger  traffic.  These  early 
packet  ships  were  stanch  vessels,  constructed  for  safety 
and  economy  rather  than  speed.  The  demand  for  speed 
came  later,  and  was  met  by  the  lines  of  clipper  sailing 
vessels  and  by  the  steamship  lines. 

The  lines  of  sailing  "  packets  "  and  clippers  were  grad- 
ually superseded  after  1850  by  the  steamship  lines.  For 
the  United  States  this  meant  a  decline  in  the  tonnage  of 
our  registered  shipping;  for  Great  Britain  it  meant  a  rapid 
expansion  of  her  merchant  marine;  for  the  ocean  transpor- 
tation service  generally  it  was  the  beginning  of  a  rapid 
development.  The  first  effect  of  steam  was  to  increase 
the  speed  and  regularity  of  ocean  transportation,  and  thus 
to  cause  a  rapid  growth  in  the  traffic  for  which  lines  of 
vessels — as  contrasted  with  the  chartered  ship  without  a 
fixed  route  and  a  definite  schedule — are  best  adapted,  viz., 
passengers,  mail  and  express,  package  freight,  or  general 
cargo,  and  perishable  commodities. 

The  second  effect  of  steam  was  to  increase  the  ship- 
ments of  bulky  cargoes  that  do  not  require  rapid  transit 
])ut  must  be  moved  cheaply,  and  must  be  delivered  at  the 
time  agreed  upon  by  the  consignor  and  consignee.     This 


130     OCEAN   AND   INLAND   WATER  TRANSPORTATION 

service  is  one  for  which  the  cliartered  steamer  is  best 
adapted;  and  the  great  expansion  in  the  tonnage  of  bulky 
goods,  and  of  the  materials  of  industry,  has  been  caused 
in  large  measure  by  tlie  "  tramp  "  steamer.  AVlien  the 
flow  of  bulky  traffic  becomes  regular  and  of  large  volume 
the  line  steamers  share  the  business  with  the  chartered 
vessel,  but  not  to  its  exclusion. 

The  evolution  of  the  ocean  transportation  service  dur- 
ing the  past  century  may  be  summarized  with  reference  to 
American  trade  as  follows:  During  the  early  decades  of 
the  last  century  the  volume  of  our  foreign  trade  became 
large  enough  to  cause  individuals,  and  companies  who 
were  not  merchants  or  traders,  to  engage  largely  in  the 
carrying  trade.  The  ocean  transportation  service  became 
a  distinct  business.  Two  kinds  of  service  then  came  to  be 
differentiated:  line  traffic  and  charter  traffic.  The  intro- 
duction of  steam  followed,  and  the  traffic  handled  by  line 
vessels  was  able  to  expand  with  great  rapidity.  In  course 
of  time — approximately  by  1870 — the  technical  improve- 
ment of  the  marine  engine,  and  the  growth  in  the  size  of 
ocean  vessels,  so  reduced  the  cost  of  moving  bulky  traffic 
by  steam  power  as  to  make  the  tramp  steamer  an  economi- 
cal carrier  of  cargo  freight.  Charter  traffic  could  be 
handled  both  by  steamers  and  sailing  vessels;  it  increased 
rapidly  in  volume,  and  has  tended  steadily  to  pass  from 
the  sailing  vessel  to  the  steamer.  Lastly,  there  is  now 
discernible  a  tendency  for  line  steamers  to  share  more  and 
more  in  the  traffic  that  formerly  was  handled  by  char- 
tered vessels.  This  is  the  result  of  the  growing  volume 
and  regularity  of  international  exchanges,  of  the  ability 
of  the  line  steamers  to  take  freight  at  lower  rates  than 
were  formerly  possible,  and  of  the  increasing  value  of 
doing  business  ra]iidly.  Electric  communication  between 
all  parts  of  the  world  and  perfected  international  bank- 
ing facilities  are  causing  international  trade  to  be  handled 


ORGANIZATION   OF  OCEAN   TRANSPORTATION        131 

more  and  more  expeditiously.  Time  is  money  to  an  in- 
creasing extent  even  in  the  bulky  traffic  of  ocean  com- 
merce. 

The  progress  of  ocean  transportation  during  the  past 
sixty  years  and  the  workmg  out  of  an  economical  organiza- 
tion for  handling  the  traffic  for  which  steamship  lines  are 
best  adapted  have  had  two  general  results.  The  small 
steamship  company  ojierating  four  or  five  small  vessels 
over  a  single  route  has  grown  to  be  a  company  owning 
scores  of  ships,  with  an  aggregate  tonnage  of  from  100,000 
to  several  hundred  thousands,  and  engaged  in  traffic  over 
numerous  ocean  routes.  These  great  companies,  further- 
more, have  found  their  competition  with  each  other  in- 
creasingly severe,  and  they  have  been  forced  to  seek  to 
control  their  interrelations  by  associated  action  and  traffic 
agreements,  or  by  the  amalgamation  of  competing  com- 
panies by  means  of  purchase  and  sale.  As  in  industry  so 
in  transportation,  l)oth  by  railway  and  on  the  ocean,  stcaiu 
l)ower  has  revolutionized  business  methods  and  compelled 
the  substitution  of  organization  and  associated  effort  for 
tlie  unorganized  struggle  of  competitive  individual  activity. 

The  extent  to  which  organization  and  coordination 
have  been  worked  out  in  the  ocean  transportation  service 
by  the  building  up  of  great  lines  may  be  illustrated  by  re- 
ferring to  the  Hamburg-American  Packet  Company,  which 
started  business  with  a  few  sailing  vessels  in  1847;  nine 
years  later  steamers  were  added  to  the  service;  in  1893  the 
company  was  operating  99  vessels  of  all  descriptions,  with 
an  aggregate  tonnage  of  over  200,000  tons.  The  fleet  of 
this  company  in  1905  comprised  324  vessels,  with  a  total 
tonnage  of  736,108.  This  included  140  ocean  steamships, 
with  a  total  tonnage  of  695,356  tons  gross.  The  company 
maintains  a  service  to  Canada,  to  the  West  Indies,  to  the 
west  coast  of  South  America,  to  China,  Japan,  Australia, 
and  to  Africa.      The  IS^orth  Gernum  Lloyd,  which  started 


132     OCEAN  AND   INLAND   WATER  TRANSPORTATION 

in  1857  with  three  steamers,  had  in  1903  a  fleet  of  315 
vessels,  with  a  tonnage  of  587,070,  in  whicli  there  were 
included  74  ocean  steamers,  with  a  tonnage  of  470,205. 
The  Ciinard  ('(>iii])aii_v  starte<l  in  IS4(),  and  had  in  11(01  a 
fleet  of  24  vessels,  aggregating  1  14,410  tons.  This,  how- 
ever, is  not  the  largest  British  (-ompany;  the;  British  India 
Company  had  117  sliips,  of  3(il,')!)5  tons,  in  1!»01 ;  and  the 
Peninsnla  and  Oriental  Comjjany  57  ships,  of  320,351 
tons. 

These  great  companies  have  been  hnilt  up  partly  by 
internal  growth  and  partly  by  buying  np  the  lines  operated 
by  other  companies.  The  most  conspicnons  instance  of 
the  combination  of  lines  was  the  formation  of  the  Inter- 
national Mercantile  Marine  Company,  which  in  1902 
brought  nnder  one  ownership  and  management  five  large 
transatlantic  lines,  whose  aggregate  fleet  comprised  136 
vessels,  with  a  tonnage  of  1,034,884,  The  lines  brought 
together  were  the  Leyland  Line,  the  White  Star,  the  Inter- 
national ISTavigation  Company,  the  Atlantic  Transport,  and 
the  Dominion  Line.  In  forming  this  merger,  Mr.  J.  P. 
Morgan  and  his  associates  sought  to  include  the  powerful 
Cimard  Company,  and  the  two  great  German  companies, 
the  Hamburg- American  and  the  ISTorth  German  Lloyd;  but 
the  Cunard  Company  was  given  a  largely  increased  subsidy 
by  the  British  Government  to  remain  an  independent  Brit- 
ish company,  and  the  two  German  lines  were  under  con- 
tract with  their  Government  not  to  sell  out  to  a  foreign 
company.  The  German  lines,  however,  entered  into  an 
agreement  with  the  International  Mercantile  [Marine  Com- 
pany whereby  a  territorial  division  of  traflic  was  effected, 
and  the  main  results  of  consolidation  were  secured. 

The  economy  of  doing  business  on  a  large  scale  ac- 
counts for  the  growth  of  the  great  steamship  companies. 
The  merger  of  these  companies  into  a  mammoth  organiza- 
tion, such  as  the  International  Mercantile  Marine  Com- 


ORGANIZATION  OF  OCEAN  TRANSPORTATION        133 

pany,  is  prompted  not  only  by  the  greater  economy  of 
management,  but  also  by  the  necessity  of  regulating  com- 
petition, which,  if  left  mirestrained,  will,  as  experience 
has  shown,  destroy  profits  and  ])revent  the  successful  de- 
velopment of  the  service.  Competition  in  the  ocean  trans- 
portation business  is  widespread  and  keen;  and  as  the  rival 
companies  become  larger  and  more  powerful  the  forces  of 
competition  I)ecome  increasingly  intense,  and  some  method 
of  regulating  the  interrelations  becomes  a  necessity. 
Hence,  we  find  that  the  growth  in  size  of  the  steamship 
companies,  and  the  develojmient  of  a  higher  organization 
of  the  service  they  perform,  is  accompanied  by  an  increas- 
ing effort  to  regulate  their  competitive  interrelations. 
The  truth  of  this  general  jn-inciple  will  l)ecome  evident 
u])on  an  analysis  of  the  nature  and  scope  of  competition 
in  the  ocean  transportation  service.  Such  an  analysis  is 
essayed  in  the  following  chapter. 

REFERENCES  FOR  FURTHER  READING 

Smith,  J.  R.     "The  Organization  of  Ocean    Commerce."     1905. 

Chapter  IV,  pp.  33-39. 
Meade,  E.  S.     "The  Internationa!  Mercantile  Marine  Company." 

Political  Science  Quarterly,  vol.  xix,  pp.  50-65.    March,  1904. 


CIIAPTEK    X 

JIONOrOLY    AND     CO:\[I'ETITION     IN     THE    OCEuVN    TEANSPORTA- 
TION    SERVICE 

A  BUSINESS  or  a  service  may  be  competitive  or  monopo- 
listic, or  it  may  be  in  part  monopolistic  and  in  part  subject 
to  competition.  A  monopoly  may  be  complete  or  partial. 
Complete  monopoly  is  the  absence  of  all  competition  as 
regards  the  fixing  of  prices.  The  essence  of  monopoly  is 
tlie  power  to  decide  what  price  the  purchaser  shall  pay; 
and  the  degree  of  monopoly  possessed  by  a  producer  or  a 
carrier  is  determined  by  the  measure  of  his  ability  to  fix 
the  charge. 

In  discussing  monopoly  and  competition,  the  author 
states,  in  his  volume  on  "  American  Railway  Transporta- 
tion," that  "  in  a  certain  sense  the  producer  (or  carrier) 
never  has  the  sole  power  to  fix  the  price,  even  though  he 
may  be  the  only  person  from  whom  the  commodity  or  serv- 
ice in  his  control  can  be  secured,  because  he  must  always 
consult  the  nature  of  the  ]iurchasers'  wants  and  their  ability 
to  pay.  If  the  possessor  of  a  monopoly  charges  more  than 
any  buyer  is  willing  to  pay,  no  sales  will  be  made;  if  the 
prices  are  fixed  higher  than  any  considerable  percentage 
of  possible  buyers  can  ntford  to  give,  the  marl^et  will  be 
largely  restricted.  This  is  equivalent  to  saying  that  the 
consumers  or  users  are  the  ones  who  fix  the  limit  beyond 
which  charges  oannot  go;  but  if  all,  or  the  larger  share,  of 
the  supply  required  by  purchasers  can  be  obtained  only 
from  one  person  or  combination  of  producers,  those  who 
134 


COMPETITION   IN  OCEAN  TRANSPORTATION  135 

sell  can  compel  those  who  buy  to  pay  all  they  arc  willing 
to  give  rather  than  go  without  the  commodity  or  service 
desired.  The  price  fixed  under  such  conditions  is  a  mo- 
nopoly price  pure  and  simple.  Those  who  sell,  charge 
what  they  think  will  yield  them  the  maximum  [jvofits  on 
their  total  business." 

If  purchasers  can  compel  those  who  have  commodities 
or  services  to  sell  to  accept  the  lowest  price  which  they  will 
take  rather  than  not  make  a  sale,  the  business  or  service 
is  one  in  which  there  is  free  competition;  if  the  producer 
or  carrier  can  compel  the  buyer  to  pay  all  he  will  give 
rather  than  forego  having  the  article  or  service  he  desires, 
there  is  complete  monopoly.  If  neither  of  the  parties  to 
the  transaction,  the  producer  and  the  consumer,  the  carrier 
and  the  shipper,  can  compel  the  other  to  accept  the  least 
favorable  terms,  there  is  neither  free  competition  nor  com- 
plete monopoly.  If  the  carrier  cannot  compel  the  shipper 
or  traveler  to  pay  all  he  would  be  willing  to  pay  rather 
than  go  without  the  service;  or,  stated  otherwise,  if  the 
buyer  of  the  service  can  compel  the  carrier  to  charge  less 
than  the  maximum  value  of  the  ser-snce  to  the  buyer,  the 
rate  or  fare  is  partly  competitive  and  partly  monopolistic. 
The  carrier  possesses  a  partial  monopoly. 

The  service  of  ocean  transportation  is  highly  competi- 
tive, much  more  so  than  the  business  of  railway  transporta- 
tion.    There  are  several  reasons  why  this  is  true: 

1.  The  ocean  is  a  highway  free  to  all  persons,  ^ot 
only  may  every  vessel  sail  the  sea  at  will;  it  may  also  enter 
the  ports  of  every  country  to  load  and  unload  cargo.  A 
small  charge  may  be  made  for  the  privilege  of  entering 
the  port  and  using  its  facilities,  but  the  rate  of  charges  is 
the  same  for  everybody.  Even  at  ports  wdiere  the  com- 
mercial facilities  have  been  provided  by  the  capital  of  a 
private  company,  the  right  of  shippers  and  carriers  gen- 
erally to  use  those  facilities  is  carefully  maintained  by 


136     OCEAN   AND   INLAND   WATER  TRANSPORTATION 

|)iil)li('  regulation.      The   ownership  of  a   port  may  l)e — 
altliough  it  usually  is  not — private,  l)ut  its  use  is  public. 

2.  A  ship  may  start  from  any  port  and  reach  any  other 
port  in  any  sea.  The  ocean  vessel  has  a  far  greater  range 
of  movement  than  has  the  railroad  train.  The  entire  sea, 
all  its  routes  and  their  termini,  arc  available  for  the  shij). 
'{'here  is  no  chance  "  to  divide  the  field  "  of  traffic  opera- 
tions at  sea,  and  restrict  the  business  of  certain  ocean 
routes  and  termini  to  a  single  carrier  or  combination  of 
carriers.  The  competition  of  the  independent  vessel  may 
and  does,  like  the  tides,  reach  every  shore. 

3.  Any  ])erson  may  easily  engage  in  ocean  transporta- 
tion. The  minimum  amount  of  capital  required  to  enter 
upon  the  business  is  small.  There  are  small  ships  as  well 
as  large  ones  that  may  be  purchased  or  hired  by  anyone 
desiring  to  become  a  public  carrier,  or  by  a  manufacturer 
or  trader  who  may  desire  to  make  but  a  single  shipment. 
A  vessel  may  be  chartered  as  readily  as  a  house  may  be 
rented.  In  each  large  port  there  are  ship  brokers  in  cable 
connection  with  other  large  ports,  and  thus  informed  re- 
garding ships  in  all  parts  of  the  world.  At  all  times  there 
are  many  vessels  desiring  cargo,  and  the  ship  broker  can 
usually  give  the  shipper  or  would-be  charterer  a  choice  of 
several  ships.  The  exporter  of  locomotives  or  bridges 
from  Philadelphia,  of  wheat  from  Chicago,  or  of  cotton 
from  ISTew  Orleans,  may  either  engage  some  existing  car- 
rier to  handle  the  traffic,  or,  if  the  rates  charged  seem 
unreasonably  high,  he  may  charter  a  vessel  either  for  a 
single  trip,  or  for  such  time  as  he  may  wish,  and  thus  trans- 
port his  own  goods. 

4.  One  may  retire  from  the  field  of  ocean  transporta- 
tion as  easily  as  he  may  enter  it.  Although  property  in  a 
ship  is  "  fixed  capital,"  in  that  the  ship  can  be  used  only 
for  the  one  service  of  transportation,  the  ownership  of 
this  fixed  capital  may  readily  change  hands.     The  ship 


COMPETITION   IN  OCEAN  TRANSPORTATION  137 

ref)resents  a  relatively  small  amount  of  capital,  as  com- 
pared with  a  railroad,  for  example,  and  under  ordinary 
conditions  a  buyer  may  readily  be  found.  At  least  there 
will  be  little  difficulty  in  finding  a  person  who  will  charter 
a  freight  vessel. 

These  four  points  indicate  the  main  differences  between 
the  railway  and  ocean  transportation  services.  The  rail- 
road company  operates  over  a  well-defined  territory  from 
which  other  rail  carriers  are  excluded.  The  roadway, 
terminal  facilities,  and  equipment  represent  a  large  in- 
vestment of  fixed  capital,  which  cannot  readily  be  sold  or 
leased.  The  owners  of  vessels,  on  the  contrary,  are  not 
restricted  to  any  territory,  nor  can  they  prevent  any  other 
owner  from  entering  the  field  they  may  select  for  their 
traffic  operations.  The  only  fixed  capital  the  ocean  carrier 
ordinarily  need  have  is  in  his  floating  equipment;  nature 
])rovides  the  roadway,  and  the  public  usually  dredges  the 
harbor  channels  and  basins. 

Property  in  vessels  can  ordinarily  be  sold  or  leased 
readily.  A  freight  vessel  is  more  easily  sold  or  chartered 
than  an  express  passenger  steamer;  but  even  for  the  latter 
there  can  usually  be  found  some  individual  or  company 
who  will  buy  or  lease,  although  the  owner  may  be  obliged 
to*  sell  at  a  sacrifice,  or  may  be  compelled  to  refit  the  ship 
for  the  freight  service  before  he  can  dispose  of  the 
property. 

The  large  ocean  carrier  who  is  operating  one  or  several 
lines  comprising  numerous  vessels,  may  find  it  advanta- 
geous to  construct  terminal  facilities;  but,  in  most  cases, 
the  central  or  local  government,  some  public  "  trust,"  or 
some  dock  company,  constructs  and  manages  the  docks  and 
wharves,  and  leases  to  the  large  lines  such  facilities  as  they 
may  require.  Even  the  largest  steamship  companies  have 
secured  exclusive  possession  of  neither  the  terminals  nor 
the  routes  of  any  portion  of  the  ocean  transportation  field, 


138     OCEAN   AND  INLAND   WATER  TRANSPORTATION 

although  for  certain  routes,  and  for  tlie  passenger  service  I 
and  the  nuul  and  express  business,  the  traffic  position  of 
certain  ])<)\verful  lines  is  now  so  strong  that  outside  compe- 
tition has  hecome  difficult  foi-  the  line  husiucss  tlic\-  hainllc. 
J^]fforts  are  now  being  made  by  tiie  great  steamship  com- 
jianies  to  restrain  competition,  and  even  to  divide  among 
themselves  the  line  traffic  over  certain  mutes  by  cniifining 
the  traffic;  operations  of  each  company  or  associated  group 
of  com])anics  to  a  definite  territory.  The  manner  in  which 
they  have  attempted  to  do  this,  the  difficulties  they  have 
encountered,  and  the  success  they  have  had,  will  be  ex- 
])Iaincd  in  the  following  chapter. 

The  difference  between  line  traffic  and  charter  traffic 
neiMJs  to  be  ke])t  clearly  in  mind  in  analyzing  the  nature  of 
comjjetition  in  the  ocean  trans])ortation  service.  In  char- 
ter traffic  competition  is  full  and  free,  and  must  always 
be  so.  There  is  no  possil)ility  of  monopolizing  the  service 
of  trans]K)rting  upon  the  ocean  the  great  staple  articles  of 
international  and  coastwise  commerce.  As  long  as  the 
ports  of  the  world  are  open  on  equal  terms  to  all  shippers 
and  carriers,  as  long  as  men  may  buy  or  charter  vessels 
and  sail  them  at  will  upon  the  high  seas,  the  rates  charged 
for  the  ocean  transportation  of  the  great  staples  of  industry 
and  trade,  and  hence  for  the  larger  share  of  the  tonnage 
of  ocean  freight,  will  be  competitive. 

In  line  traffic  competition  may  be  restricted  to  some 
extent.  To  establish  a  line  of  large  fast  steamers,  each  of 
10,000  to  20,000  tons  gross  register,  capable  of  main- 
taining a  speed  of  from  15  to  22  knots,  having  weekly  or 
more  fre(pient  sailings  from  each  side  of  the  Atlantic  or 
Pacific;  in  other  words,  to  fulfill  the  requirements  that 
must  be  met  in  the  ]iresent-day  passenger  and  mail  serv- 
ices, means  the  investment  of  several  millions  of  dollars, 
and  the  organization  of  a  bnsiness  that  only  a  large  corpo- 
ration can  undertake.     In  such  a  business  the  number  of 


COMPETITION   IN  OCEAN  TRANSPORTATION  139 

competitors  will  be  limited,  and  if  the  small  number  of 
rivals  can  come  to  an  agreement  as  to  rates,  division  of 
traffic,  or  pooling  of  earnings,  competition  can  be  regu- 
lated and  some  measure  of  monopoly  can  be  established. 

The  competition  among  powerful  ocean  steamship  lines 
for  the  transportation  of  passengers,  mails,  and  express 
freight  is  similar  to  the  competition  of  rival  railway  sys- 
tems. In  each  case  there  is  a  powerful  incentive  to  hold 
traffic  against  competitors,  and  to  add  steadily  to  the  vol- 
ume of  business.  Until  the  point  of  maximum  traffic  is 
reached,  more  passengers  and  more  freight  mean  more 
than  a  proportionate  increase  in  profits.  "  The  law  of 
increasing  returns  "  obtains  in  the  transportation  business 
on  the  ocean  as  well  as  on  the  land. 

The  competition  among  great  steamship  lines  is  inev- 
itably intense.  Each  corporation  has  an  enormous  invest- 
ment at  stake,  and  while  its  ships  can  be  transferred  to 
some  other  ocean  route  and  to  some  other  service,  the 
vessels,  having  been  constructed  and  equipped  with  special 
reference  to  the  particular  service  they  are  performing, 
cannot  be  sold  or  transferred  to  some  other  route  without 
large  financial  loss. 

At  the  same  time  the  prize  to  be  gained  by  successful 
competition  is  a  large  one.  To  be  able  to  secure  and  hold 
against  rivals  the  steadily  increasing  cabin  and  steerage 
passenger  traffic,  the  contracts  for  carrying  the  mails,  and 
the  business  of  handling  express  and  fast  freight  over 
any  one  of  several  of  the  more  important  routes  across  the 
Atlantic  or  Pacific,  or  between  Europe  and  the  Orient,  is 
to  obtain  possession  of  a  large  business  containing  the 
prospect  of  becoming  increasingly  profitable  with  the  nat- 
ural growth  in  the  jiopulation  and  trade  of  the  conntries 
connected. 

Thestriiggles  of  such  giants  for  ])i'izes  so  great  are  ai^t 
to  be  financially  destructive  for  both  or  all  ('()nil)atants. 
11 


140     OCEAN   AND  INLAND   WATER  TRANSPORTATION 

Like  the  traffic  wars  of  powerful  railroad  companies,  the 
competition  of  great  steamship  companies  becomes  so  severe 
as  to  cease  to  be  a  healthy  stimulus  to  business,  artificial 
and  unstable  conditions  of  trade  are  created,  and  at  the 
close  of  the  struggle  the  carriers  find  themselves  financially 
weak,  and  less  able  than  they  were  at  the  beginning  of 
their  traffic  war  to  improve  their  service  and  to  keep  their 
equipment  and  facilities  abreast  of  business  needs. 

As  with  rival  railroads,  so  with  competing  steamship 
companies,  cooperation  for  the  regulation  of  competition 
is  necessary.^  This  is  shown  clearly  by  the  history  of  the 
interrehitions  of  steamship  companies,  by  the  rate  and 
traffic  agreements  and  pooling  arrangements  they  have 
made,  by  the  merging  of  small  companies  into  larger  ones, 
and  by  the  consolidation  of  several  large  companies  into 

'  The  thought  that  unbridled  competition  is  beneficial  neither  in  in- 
dustry nor  in  transportation,  and  is  detrimental  to  the  public  as  well  as 
to  the  carrier,  was  eloquently  expressed  by  the  Hon.  Martin  A.  Knapp, 
Chairman  of  the  Interstate  Commerce  Commission,  in  an  address  on 
"The  Social  Effects  of  Transportation,"  delivered  before  the  American 
Academy  of  Political  and  Social  Science  in  1902.  "When  population 
was  scattered  and  sparse,  when  movement  was  difficult  and  costly,  when 
communities  were  isolated  by  distance  and  by  dissimilarity,  and  bonds 
of  relationship  were  feeble  and  few,  the  attrition  of  rivalr\'  was  com- 
placently endured.  But  now,  when  seas  are  spanned  with  steamships 
and  netted  with  electric  wires;  when  city  and  forest,  farm  and  factorj', 
mine  and  countingroom,  are  joined  together  by  innumerable  pathways 
of  steel,  and  the  swift  locomotive,  rushing  across  continents,  like  the 
shuttle  through  the  loom,  weaves  this  majestic  fabric  of  commerce 
which  eovers  the  globe;  when  life  is  no  longer  localized  in  effort  or 
achievement,  and  the  thought  of  one  man  is  the  instantaneous  posses- 
sion of  all  men,  the  friction  of  unbridled  competition  has  become  irk- 
some and  intolerable.  It  is  folly  to  shut  our  eyes  to  unmistakable  facts, 
or  to  stand  in  the  way  of  inevitable  events.  Doubters  may  deride, 
demagogues  denoimce.  and  ignorant  lawmakers  strive  to  build  up  legal 
barriers;  but  neither  agitation,  nor  protestation,  nor  legislation  can  stop 
the  growth  or  prevent  the  advance  of  industrial  federation."  {Annals 
of  the  American  Academy  of  Political  and  Social  Science,  July,  1902, 
vol.  XX,  p.  14.) 


COMPETITION   IN   OCEAN   TRANSPORTATION  141 

a  yet  more  powerful  corporation.  Before  taking  np  the 
question  of  rates  it  will  be  well  to  study  the  history  of  the 
interrelations  of  ocean  carriers. 


REFERENCES    FOR    FURTHER    READING 

Johnson,  E.  R.  "American  Railway  Transportation."  1903. 
Chapter  XVIII  on  "  Monopoly  and  Competition  in  the  Rail- 
way Service." 

Knapp,  M.  a.  "  Social  Effects  of  Transportation."  Annals  of  the 
American  Academy  of  Political  and  Social  Science,  vol.  xx,  pp. 
1-15.  1902.  "  Some  Observations  on  Railway  Pooling." 
Ibid.,  vol.  viii,  pp.  127-47.     1896. 


CHAPTER    XI 

RATE   AND    TRAFFIC    AGKEEMEXTS,    POOLS,    AND   CONSOLIDA- 
TIONS  OF  OCEAN  CARRIERS 

A  LARGE  measure  of  cooperation  among  ocean  carriers 
is  necessary  for  them,  and  may  be  of  advantage  to  ship- 
pers. The  competition  of  steamship  lines  with  each  other 
is  so  intense,  and,  unless  restrained  by  some  agreement 
among  the  carriers,  is  so  persistent,  that  the  successful 
and  jirofitable  management  of  the  ocean  transportation 
business  under  existing  conditions  practically  requires  the 
steamship  lines  to  enter  into  arrangements  regulating 
their  interrelations. 

The  agreements  required  to  regulate  the  competitive 
relations  of  ocean  carriers  necessarily  include  many  de- 
tails. It  is  the  purpose  of  this  chapter  to  state  the  main 
provisions  contained  in  these  agreements,  and  to  consider 
briefly  the  results  that  have  been  accomplished  by  the 
cooperation  of  ocean  lines. 

Although  the  chief  purpose  of  cooperation  among 
ocean  carriers  is  to  restrain  competition,  their  rate  and 
traffic  agreements,  and  the  pools  they  form  may  be  a 
benefit  to  shippers.  The  merchant  engaged  in  interna- 
tional trade  desires  an  adequate  service  at  rates  that  are 
reasonable  and  fairly  stable;  fluctuating  rates  seriously 
interfere  with  trade,  whether  it  be  domestic  or  interna- 
tional. Sudden  and  large  changes,  often  characteristic  of 
ocean  rates,  may  interfere  with  the  development  of  com- 
merce as  seriously  as  the  unstable  competitive  rates  by 
142 


TRAFFIC  AGREEMENTS  OF  OCEAN  CARRIERS         143 

rail  ill  the  United  States  have  in  times  past  hampered  the 
industrial  development  of  different  sections  of  our  coun- 
try. Mr.  Ellerman,  chairman  of  the  Ellerman  Lines, 
speaking  at  an  annual  meeting  of  that  company  a  few 
years  ago,  stated  that  "  shippers  and  merchants,  as  a  body, 
commonly  prefer  a  basis  of  trade  common  to  all  shippers, 
on  which  they  are  enabled  with  confidence  to  conduct 
their  calculations  as  to  the  prices  at  which  they  can  land 
goods  at  any  given  point.  Merchants  are  thereby  en- 
abled' to  conduct  their  business  without  the  risk  of  seri- 
ous fluctuations  in  freight  from  week  to  week,  and  tliev 
also  have  the  knowledge  that  all  merchants  are  paying 
the  same  rates  of  freight." 

From  the  shipper's  point  of  view,  the  advantages  of 
cooperation  on  the  part  of  the  steamship  lines  are  that 
cooperation  gives  a  more  regular  service,  a  better  adjust- 
ment of  schedules  of  sailings,  and  greater  stability  in  rates. 
These  benefits  to  the  shipper,  however,  may  be  largely 
nullified  by  the  steamship  companies,  if  they  follow  a 
policy  of  restricting  the  development  of  the  service,  and  a 
policy  of  high  fares  and  small  volume  of  business  instead 
of  low  fares  and  maximum  trafiic.  Instances  are  not 
wanting  of  arbitrary  action  on  the  part  of  the  steamship 
organizations  to  prevent  outside  lines  from  interfering 
with  the  established  traffic  of  the  associated  companies, 
and  shippers  are  often  penalized  for  patronizing  lines  not 
l)elonging  to  the  combination.  The  tendency  of  those 
])ossessing  exclusive  privileges  is  to  seek  vigorously  to  re- 
tain such  privileges  against  outside  interference;  accord- 
ingly, it  may  well  happen  that  combinations  among  ocean 
carriers,  which  seem  to  be  rendered  necessary  by  the 
severity  of  unrestricted  competition,  should  be  regulated 
by  adequate  legislation  and  be  carefully  supervised  by 
governmental  authority. 

The  name  "  Conference  "  is  given  to  associations  of 


144     OCIOAN   AND   INLAND   WATER  TRANSPORTATION 

ocean  lines.  The  lines  from  Europe  or  the  United  States 
to  each  important  section  of  the  world  usually  unite  in 
a  conference.  There  is,  for  example,  a  South  African 
Conference,  a  China  Conference,  and  an  Australian  Con- 
ference of  the  Eiiro])e;ni  lines,  and  others  for  East  South 
America,  West  South  .Vmerica,  etc.  Sometimes  the  lines 
from  the  United  States  are  members  of  a  European  con- 
ference, and  sometimes  the  American  lines  have  separate 
associations. 

The  vessel  lines  foi'inini;  a  conference  enter  more  or 
less  formally  into  agreements  regardino-  the  number  of 
vessels  each  line  shall  operate,  the  days  of  sailing,  the 
classiiication  of  freight,  and  freight  rates.  Sometimes 
these  agreements  provide  for  a  division  of  the  traffic  field; 
in  some  instances  a  division  of  the  traffic  within  a  com- 
mon field  is  provided  for;  and  frequently  provisions  are 
made  for  pooling  the  earnings  of  the  several  lines  and 
dividing  the  joint  earnings  according  to  stipulated  ratios. 
With  the  exception  of  the  pooling  contracts,  the  agree- 
ments entered  into  by  lines  forming  a  conference  are 
more  in  the  nature  of  "  gentlemen's  agTcements  "  than 
of  legally  enforcil)le  contracts.  The  agreements  are  usu- 
ally for  one  year,  and,  as  will  be  shown  later,  are  usually 
unstable,  requiring  frequent  amendments  and  readjust- 
ments. 

The  system  ])revails  of  giving  rebates  from  the  freight 
charges,  usually  ten  per  cent,  to  those  shippers  who  pat- 
ronize only  the  vessels  belonging  to  the  members  of  the 
conference.  Shippers  who  patronize  outside  lines  are 
compelled  to  pay  the  full  rates  without  subsequent  rebate. 
Tlie  funds  required  to  pay  the  small  expense  of  admin- 
istering the  conference  are  secured  by  levying  upon  the 
members  of  the  association,  each  line  paying  in  propor- 
tion to  the  amount  of  business  it  handles. 

These  conferences   of  ocean   carriers   have   different 


TRAFFIC   AGREEMENTS   OF   OCEAN   CARRIERS         145 

forms  of  organization  and  different  pnrposes.      The  fol- 
lowing types  are  distinguislialde: 

1.  Representatives  of  the  steamship  lines  operating 
from  any  one  port  may  confer  more  or  less  frequently 
in  regard  to  dates  of  sailing,  frequency  of  service,  classi- 
fication of  traffic  and  rates,  and  other  matters  of  mutual 
interest.  These  conferences  may  be  without  formal  or- 
ganization, and  be  only  for  the  purpose  of  reaching  a  com- 
mon understanding  as  to  the  interrelations  of  the  com- 
petitive carriers,  with  the  hope  that  business  arrangements 
satisfactory  to  all  parties  concerned  may  be  decided  upon. 

2.  The  conference  may  have  a  more  formal  organiza- 
tion, with  a  secretary  and  other  officers  elected  to  super- 
vise and  regulate  the  business  arrangements  entered  into 
by  the  members  of  the  association.  A  good  example  of 
this  more  permanent  type  of  organization  is  the  North 
Atlantic  Steam  Traffic  Conference,  which  has  had  a  more 
or  less  continuous  existence  for  many  years.  It  has  at- 
tempted to  regulate  the  freight  business  of  the  conference 
lines  by  deciding  upon  the  number  of  the  ships  each  line 
should  operate,  and  the  terminal  services  that  should  be 
rendered  by  vessel  owners,  and  it  has  also  sought  as  far 
as  possible  to  regulate  freight  rates.  Rates,  how^ever,  are 
so  highly  competitive  in  the  ISTorth  Atlantic  service  that 
the  traffic  conference  has  succeeded  only  in  a  slight  degree 
in  deciding  upon  an  enforcible  schedule  of  charges. 

The  most  systematic  effort  made  by  the  Conference  to 
control  freight  rates  was  the  attempt  made  in  1902,  when 
its  members  entered  into  the  "  minimum  freight  agree- 
ment," whereby  each  line  pledged  itself  to  charge  not 
less  than  stipulated  rates  for  the  relatively  limited  num- 
ber of  articles  enumerated  in  the  compact.  By  this 
agreement  an  effort  was  made  to  put  an  end  to  the  de- 
moralization in  freight  rates  that  occurred  in  1902,  when 
the  shipping  facilities  were  so  much  in  excess  of  the  de- 


146     OCEAN   AND   INLAND   WATER  TRANSPORTATION 

iiiniid  f'(»r  ships  that  ocean  rates  ,i;eiiei-ally  went  to  a  riiiii- 
ously  h)\v  li<>ure.  For  about  two  years  this  mininiuni 
frei^i^lit  ai;reeiiieiit  was  fairly  successful  in  preventing 
serious  cuttini;  of  rates  u])on  a  limited  class  of  goods.  A 
sincere  eifort  was  made  on  tlie  |)art  of  the  coini)anies  in 
the  conference  to  aeconiplish  the  regulation  of  freight 
rates,  and  the  fact  that  this  agreement  was  only  |)ai'tially 
successful,  and  lasted  foi*  only  two  years,  indicates  the 
dithculty  of  regulating  competition  among  ocean  carriers. 

Another  important  conference  similar  to  the  one  for 
the  ]^orth  Atlantic  steam  traffic  is  the  International  (^)n- 
ference  of  Shipowners  Engaged  in  the  Baltic  and  White 
Sea  Trades.  This  association  has  met  annually  from  1800 
to  the  present  time,  and,  as  its  title  suggests,  it  comjirises 
the  principal  shipowners  engaged  in  the  Baltic  and  White 
Sea  trades.  The  conference  in  1905  met  at  Copenhagen, 
Febnuiry  16,  17,  18,  at  which  time  a  minimum  schedule 
of  rates  adjusted  for  various  ports  is  reported  to  have 
been  adopted.^  As  there  are  numerous  individual  ves- 
sels and  lines  of  ships  outside  of  the  conference,  there  is 
little  certainty  as  to  the  ability  of  the  mend>ers  of  the 
organization  to  enforce  the  scale  of  rates  agreed  upon. 
Whether  they  succeed  in  doing  so  will  depend  upon  the 
ratio  of  shipi)ing  facilities  to  freight.  If  the  relatively 
active  demand  for  shipping  that  prevailed  at  the  time  of 
the  adoption  of  the  scale  of  rates  should  continue  it  will 
probably  be  possible  to  maintain  conference  rates,  other- 
wise not, 

3.  As  a  third  type  of  organization  may  he  mentioned 
The  Sailing  Shipowners  International  Union,  organized 
December,  1903,  for  the  object  of  fixing  minimum  rates 
of  freight  for  the  principal  voyages  in  which  sailing  ves- 
sels are  engaged  in  bringing  freight  to  European  ports 
from  countries  outside  of  Enrope.     A  permanent  com- 

'  See  Fairplay,  March  16,  1905,  p.  438. 


TRAFFIC  AGREEMENTS   OF  OCEAN   CARRIERS         147 

mittee  is  authorized  1)y  tlic  union  to  fix  these  freight  rates 
from  time  to  time  for  the  various  leading  foreign  ports. 
In  joining  the  union  each  member  promises  to  abide  by 
all  rates  fixed  by  the  union,  and  not  to  grant  any  rebates 
or  commissions.  lie  also  agrees  to  let  his  slii})  lie  l)y  or 
sail  in  ballast  if  cargo  cannot  be  secured  at  union  rates. 
The  agreement  applies  only  to  sailing  vessels  of  one  thou- 
sand tons  or  more  burden;  the  membershij)  is  for  one  year; 
and  three  months'  notice  must  be  given  of  intention  to 
withdraw  from  the  union.  To  defray  the  expense  of  ad- 
ministering the  union  each  member  is  required  to  con- 
tribute £1  per  annum  for  each  vessel  entered.  At  the 
second  annual  meeting  of  the  union,  held  in  Paris,  De- 
cember, lOO-i,  favorable  reports  were  given  as  to  the 
operation  of  the  agreement.  It  was  said  that  three 
fourths  of  the  seagoing  sail  tonnage  available  for  member- 
ship had  become  identified  with  the  union.  The  future 
of  this  organization  may  be  watched  with  interest.  The 
task  it  has  undertaken  is  so  difiicult  that,  if  it  should  suc- 
ceed in  accomplishing  its  purpose,  and  should  continue  in 
existence  for  a  number  of  years,  its  success  would  indicate 
that  much  progress  has  been  nuide  in  the  ability  to  limit 
competition  in  the  ocean  ti"iiii^p<»i"tati(m  service. 

4.  The  Chamber  of  Slii])ping  of  the  Ignited  Kingdom 
is  a  general  organization  of  those  engaged  in  the  ocean 
transportation  business  from  the  ports  of  that  country. 
This  association  corresponds  to  a  chamber  of  commerce, 
and  is  concerned  with  general  (piestions  of  shipping  policy 
rather  than  with  the  regulation  of  competition  among 
shipping  lines.      Its  offices  are  in  London. 

A  study  of  the  main  j)rovisions  of  the  agreements 
entered  into  by  the  steamshij)  lines  in  their  "  conferences  " 
will  indicate  the  purpose  and  scope  of  these  organizations. 
The  agreements  are  not  the  same  for  every  conference, 
the  plan  of  organization  being  broader  in  some  instances 


148     OCEAN   AND   INLAND   WATER   TRANSPORTATION 

tlijiii  ill  others.  The  provisions  discussed  below  are  to  he 
taken  as  covering  the  conferences  as  a  wliole,  rather  than 
the  contracts  entered  into  hy  the  constituent  lines  of  any 
particnlar  or<;anization. 

1.  The  most  inijioi'tant  aoreenient  is  in  regarrl  to  rates 
tliat  shall  be  charged  by  th(»  lines  that  ar(^  members  of 
the  conference.  The  chief  jiurpose  of  joint  action  is  to 
])revent  comj)etition  from  forcing  rates  below  a  profitable 
level.  The  agreenu'nt  may  provide  either  that  the  several 
coiiipaiiics  shall  charge  the  same  rates,  or  that  they  shall 
not  charge  less  than  stipulated  minimum  rates.  The  en- 
forcement of  the  agreement  is  difficult,  and  frequent  re- 
visions of  the  terms  are  usually  necessary.  Sometimes 
compliance  with  the  agreement  is  secured  by  pooling  the 
receipts  from  the  competitive  traffic;  more  often,  how- 
ever, the  observance  of  the  contract  is  enforced  by  the 
understanding  that  any  company  violating  the  agreement 
will  have  to  contend  against  the  united  opposition  of  all 
the  other  members  of  the  conference. 

2.  The  rates  agreed  upon  by  the  conference  are  in 
part  based  upon  a  rough  classification  of  the  freight  car- 
ried by  the  constituent  companies.  The  variety  of  the 
articles  transported  even  by  the  largest  steamship  com- 
pany is  much  less  than  the  number  handled  by  the  or- 
dinary railroad  company,  and  the  classification  of  ocean 
freight  is  nuich  less  complete  than  that  of  rail  traffic. 
Indeed,  the  tonnage  of  the  exports  from  the  United  States 
to  Europe  consists  so  largely  of  a  few  bulky  commodities, 
and  to  so  small  an  extent  of  general  manufactures  other 
than  heavy  mineral  products,  that  the  classification  of  the 
articles  included  in  our  exports  to  Europe  is  not  general. 

The  steamship  lines  from  northern  Europe  carry  a 
large  variety  of  connnodities,  and  the  classification  of  their 
freight  has  been  worked  out  more  fully  than  have  the 
exports  from  the  United   States  to  Europe.     The   lines 


TRAFFIC  AGREEMENTS   OF  OCEAN  CARRIERS         149 

from  Bremen  to  Xew  York  and  Baltimore,  for  instance, 
divide  the  freight  they  carry  into  five  general  classes, 
each  class  having  its  own  rate;  the  freight  from  Bremen 
to  New  Orleans,  comprising  a  smaller  number  of  articles, 
is  grouped  into  two  classes;  the  traffic  from  Rotterdam 
to  South  Africa  is  divided  into  four  classes,  and  that  from 
Rotterdam  to  the  Dutch  East  Indies  into  five  classes. 
One  of  the  interesting  ocean  freight  classifications  is  that 
adopted  a  few  years  since  by  the  Royal  Mail  Steam 
Packet  Company  for  its  business  from  Great  Britain  to 
the  Pacific  ports  of  Central  America  and  Mexico.  The 
lung  list  of  articles  is  grouped  under  the  seven  follow- 
ing heads:  "valuable,"  "fine,"  "coarse,"  "common," 
"  rough,"  "  special,"  and  "  iron."  As  is  the  case  with 
railroad  freight,  the  ocean  lines  carry  a  large  tonnage  of 
unclassified  articles. 

There  is  less  necessity  for  detailed  classification  of 
ocean  freight  than  of  rail  freight;  the  competition  is  more 
active,  changes  in  rates  are  more  frequent,  and  conse- 
quently the  conditions  are  far  less  favorable  for  classifi- 
cation. The  tendency",  however,  for  the  companies  opera- 
ting from  Europe  to  I^ew  York  and  to  South  Africa  is  to 
work  under  a  common  classification;  for  those  to  South 
America  to  have  a  classification  adapted  to  that  traffic ; 
and  the  same  is  true  of  the  lines  to  Australia  and  to  the 
Orient.  In  only  a  few  instances  are  these  classifications 
permanent  enough  to  warrant  their  being  printed ;  more 
often  they  are  distributed  in  typewritten  form  among  the 
companies  interested  in  them. 

The  following  interesting  comparison  of  freight  classi- 
fication in  the  railway  business  and  the  ocean  freight  serv- 
ice is  taken  from  a  letter  received  by  the  author  from 
William  H.  Avery,  general  agent,  Toyo  Kisen  Kaisha 
(Oriental  Steamship  Company):  "  The  common  tariffs  for 
ocean  freight  would  not  answer  the  same  purposes  as  the 


150     OCEAN   AND   INLAND   WATER  TRANSPORTATION 

classifications  and  tariffs  of  our  domestic  railroads;  their 
classifications  and  tariffs  on  the  various  articles  of  freight 
being  l)ased  on  the  volume  of  certain  commodities  mov- 
ing between  given  points  as  well  as  upon  the  maiincr  in 
which  thev  ai'o  shipped,  whether  completely  boxed  or 
crated,  whether  set  up  or  K.D.  [knocked  down],  or 
ship])ed  in  baskets  or  bundles,  etc.  As  the  number  of 
different  articles  offered  for  transportation  to  our  rail- 
roads greatly  ex(?eeds  those  shipped  to  foreign  countries, 
and  as  the  methods  of  preparing  the  articles  for  shipment 
differ,  it  is  necessary  that  they  be  classified  separately,  in 
order  to  apply  the  proper  freight  charges  on  them.  This 
may  be  illustrated  by  referring  to  the  classification  of 
articles  of  crockery  and  earthenware  as  shown  in  the  cur- 
rent edition  of  the  '  Western  Railroad  Classification.' 
These  are  rated  as  follows  in  less  than  carload  quantities: 

In  barrels,  boxes,  or  kegs second  class 

In  stave  baskets  with  light  wood  covers second     " 

In  barrels  with  cloth  tops first  " 

In  ordinary  crockery  crates  or  casks third        " 

In  circular    slatted    crates  bound    with    wire  or 

wooden  hoops second     " 

While  in  carloads  of  24,000  pounds  they  can  be  shipped 
in  any  of  the  above  packages  at  a  fifth-class  rate. 

"  The  same  goods,  except  where  they  form  a  staple 
article  of  trade  between  two  foreign  countries,  in  wdiich 
case  special  rates  are  provided,  are  taken  as  general  mer- 
chandise, at  so  much  per  ton,  weight  or  measurement, 
ship's  option  (usually  2,000  pounds,  or  forty  cubic  feet, 
being  considered  a  ton);  in  other  words,  if  the  shipment 
measures  thirty  cubic  feet  and  weighs  only  1,000  pounds, 
freight  is  assessed  on  the  measurement  basis,  and  vice 
vei'sa.  The  manner  and  the  methods  of  packing  goods 
for  ocean  transportation  do  not  enter  into  the  subject  of 
ocean  rates  so  extensivelv  as  thev  do  in  railroad  traffic, 


TRAFFIC   AGREEMENTS   OF   OCEAN  CARRIERS        151 

for  the  reason  that  goods  are  invariably  prepared  for 
shipment  with  the  view  to  a  long  voyage  and  more  severe 
handling." 

3.  An  essential  featnre  of  the  agreement  among  the 
members  of  the  conference  is  that  of  granting  a  rebate 
— usually  of  ten  per  cent — from  the  freight  charges  to 
those  shippers  who  patronize  only  the  vessels  belonging 
to  the  conference  lines.  The  rebates  are  sometimes  cal- 
culated each  six  months,  and  are  made  payable  six  months 
after  the  calculation  is  made;  in  other  instances  the  re- 
bates are  reckoned  at  the  end  of  each,  year,  and  are  pay- 
able six  months  thereafter.  According  to  Sir  Donald 
Currie,  the  chairman  of  the  Union-Castle  Mail  Steamship 
Company,  "  this  so-called  rebate  system  prevails  in  every 
ocean  steam  trade,  and  while  providing  the  necessary  sup- 
port which  steamers  (to  be  regularly  employed)  really 
require,  it  secures,  under  suitable  arrangements  with  the 
merchants,  regularity  of  rates,  as  well  as  the  supply  of 
sufficient  steam  tonnage." 

The  editor  of  Fairplay  is  also  of  the  opinion  that  the 
rebate  system  is  useful  and  necessary.  He  states  that 
"  the  rebate  system  has  been  found  of  great  service  in 
all  shipping  trades,"  because  it  "  prevents  the  cutting  of 
rates,  and  is  to  that  extent  as  much  a  protection  to  the 
shippers  as  to  the  '  ring  '  "  (conference). 

Besides  granting  rebates  to  shippers  who  patronize 
only  the  conference  lines,  the  association  guarantees  that 
shippers  shall  have  the  advantage  of  regular  sailings,  of 
an  adequate  supply  of  tonnage,  and  that  they  shall  all  be 
charged  equal  rates  for  equal  services.  The  conference 
lines  further  agree  to  protect  their  shippers  against  the 
competition  of  outside  merchants  by  meeting  the  ocean 
freight  rates  secured  by  the  competing  merchants  from 
carriers  not  belonging  to  the  conference.  These  guaran- 
tees may  unquestionably  be  of  great  value  to  the  shippers, 


152     OCEAN   AND   INLAND   WATER  TRANSPORTATION 

and  they  go  far  to  explain  the  slight  and  infrequent  oppo- 
sition that  shippers  show  to  combinations  among  ocean 
carriers. 

4.  Another  provision  frequently  included  in  the  agree- 
ment entered  into  by  the  members  of  the  conference  is 
one  providing  for  a  division  of  the  traffic.  This  is  some- 
times accomplished  by  a  territorial  division  of  the  busi- 
ness, each  line  being  given  the  right  to  handle  the  traffic 
of  certain  designated  ports.  When  the  territorial  divis- 
ion of  traffic  is  not  practicable  it  is  frecpiently  possible 
for  several  lines  operating  from  the  same  port  or  ports  to 
divide  the  traffic  of  their  common  territory. 

A  good  instance  of  the  territorial  division  of  traffic 
is  that  made  in  1902  by  the  Booth  Line,  the  Hamburg- 
American  Packet  Company,  and  the  South  American 
Steam  Navigation  Company.  It  was  agreed  among  these 
three  lines  that  the  British  company  should  cease  to  run 
vessels  between  Hamburg  and  north  Brazil,  and  that  the 
German  lines  should  withdraw  the  vessels  they  were  run- 
ning from  New  York  and  Liverpool  to  points  in  north 
Brazil. 

In  1902,  Barber  and  Company,  of  New  York,  and 
the  General  Transatlantic  Company  of  France,  made  an 
agreement  which  provided  that  the  vessels  of  the  French 
company  should  be  operated  between  Havre  and  American 
ports,  and  that  the  steamers  belonging  to  the  New  York 
firm  should  make  Bordeaux  and  Dunkirk  their  French 
ports. 

One  of  the  best  examples  of  territorial  division  of 
traffic  is  that  afforded  by  the  agreement  between  the  In- 
ternational Mercantile  Marine  Company  and  the  German 
lines.  One  of  the  provisions  of  that  agreement  was  that 
the  vessels  of  the  International  Mercantile  Marine  Com- 
pany should  not  interfere  with  the  traffic  of  the  German 
lines  in  German  ports;  an  understanding  was  also  reached 


TRAFFIC   AGREEMENTS   OF  OCEAN  CARRIERS        153 

as  to  the  British  ports  at  which  the  German  lines  should 
call  on  their  trips  to  and  from  the  United  States. 

A  division  of  traffic  among  the  lines  doing  business  at 
the  same  ports  or  within  the  same  traffic  territory  is  fre- 
quently made.  A  good  illustration  of  this  kmd  of  an 
agreement  is  the  one  entered  into  by  two  British  com- 
panies— the  Peninsular  and  Oriental  Line  and  the  British 
India  Line — and  the  German  company  operating  the 
Hansa  Line.  This  agreement,  made  in  1893,  stipulated 
that  the  British  lines  should  handle  the  traffic  to  India 
from  Middleborough  and  London,  and  should  not  inter- 
fere with  the  traffic  of  the  Hansa  Line  at  Hamburg  and 
Antwerp.  In  1898  this  agreement  was  so  modified  that 
the  British  lines  were  each  to  be  permitted  to  have  six 
sailings  per  year  from  Antwerp  to  Madras,  and  six  sail- 
ings from  Antwerp  to  Bombay  and  Karachi,  provided  tliat 
the  Hansa  company  was  not  able  to  handle  this  traffic. 
The  agreement  also  stipulated  the  quantity  of  cargo  that 
might  be  taken  upon  any  voyage.  This  agreement  lasted 
until  June  30,  1905,  when  the  Peninsular  and  Oriental 
Company  withdrew,  in  order  to  enter  more  largely  into 
the  traffic  from  Antwerp. 

A  division  of  traffic  within  the  same  territory  was 
arranged  for  in  1905  in  a  slightly  different  manner  by 
two  French  lines,  whereby  it  was  agreed  that  they  would, 
after  August  1,  1905,  conduct  their  services  to  Indo- 
China,  China,  and  Japan  by  alternate  sailings  from  Brit- 
ish ports,  in  order  thereby  to  divide  the  traffic  between 
the  vessels  of  the  two  lines.  An  agreement  similar  to 
this  was  entered  into  in  1902  by  the  Prince  Line  and  the 
Houston  Line.  The  two  companies  decided  to  unite  in 
performing  a  service  by  alternate  fortnightly  sailings 
from  New  York  to  Capetown,  Port  Natal,  and  Delagoa 
Bay. 

5.  The  agreement  entered  into  by  rival  ocean  carriers 


154     OCEAN   AND  INLAND   WATER  TRANSPORTATION 

occasionally  provides  for  tlu^  pooling  of  the  profits  of  the 
competitive  business.  'J'he  pooling  contracts  of  ocean 
carriers  are  similar  to  those  existing  in  the  railway  busi- 
ness in  the  United  States  before  1887.  The  establishment 
and  maintenance  of  a  pool  among  ocean  carriers  presents 
exceptional  difficulties,  because  of  the  strength  of  com- 
petition in  the  ocean  transportation  service,  and  because 
of  the  fre(|uent/  changes  in  the  conditions  affecting  the 
service.  The  conse(]uence  is  that  ocean  pools  cover  only 
a  small  portion  of  the  competitive  business  of  carriers, 
and  such  j)ools  as  arc  formed  do  not  usually  have  a  long 
life. 

A  typical  pool  in  the  ocean  transportation  business 
was  that  established  by  the  IIaml)urg-American  and  the 
Hamburg-South  American  companies  in  December,  1000, 
at  which  time  it  was  agreed  that  the  Hamburg- American 
Comi)any  was  to  receive  one  third  and  the  Hamburg-South 
American  Company  two  thirds  of  the  profits  of  the  busi- 
ness handled  by  the  two  companies  between  Hamburg  and 
the  east  coast  of  South  America. 

An  agreement  entered  into  in  September,  1904, 
between  the  Austrian  Lloyd  Company  and  the  Puglia 
Steam  ISTavigation  Company  (an  Italian  company),  pro- 
vided that  the  Lloyd  line  should  receive  three  fifths  and 
the  Italian  line  two  fifths  of  the  competitive  business  of 
the  two  comjianies. 

As  another  instance  of  a  pooling  arrangement  men- 
tion may  be  made  of  the  agreement  which  existed  for 
some  years  ])revious  to  1905  between  the  Cunard  Steam- 
ship Company  and  the  White  Star  Line,  which  two  com- 
panies shared  equally  the  earnings  received  for  carrying 
the  mails  west-bound  from  the  United  Kingdom.  This 
]iooliiig  arrangement  terminated  in  1905,  at  which  time 
the  (^mard  Company  refused  to  coiiperate  in  the  future 
with  the  White  Star  Line  in  ju-oviding  the  British  Gov- 


TRAFFIC  AGREEMENTS  OF   OCEAN   CARRIERS         155 

ernment  with  a  joint  mail  service  based  upon  a  pool  of 
the  earnings  therefrom. 

A  large  and  important  pooling  arrangement  was  en- 
tered into  in  1901  bj  numerous  steamship  lines  operating 
vessels  between  the  United  Kingdom  and  South  Afriea. 
This  jiool  provided  for  common  rates,  and  a  division  of  the 
business  according  to  agreed  ratios.  The  pool  was  in  suc- 
cessful operation  until  the  latter  part  of  1903,  when  the 
competition  of  the  outside  lines  led  to  the  termination  of 
the  agreement.  The  difficulty  of  administering  a  large 
|)()oling  arrangement  such  as  this  is  indicated  by  the  fact 
that  during  the  year  1902  there  were  eighty-seven  meet- 
ings of  the  representatives  of  the  pooled  lines,  and  in  1903 
sixty-one  meetings  up  to  August,  after  which  no  confer- 
ences were  held. 

Workable  and  effective  agreements  among  rival  ocean 
carriers  are  difficult  to  make  and.  more  difficult  to  main- 
tain. The  all-pervading  influence  of  competition  not  only 
between  two  or  more  lines,  but  between  line  vessels  and 
those  operated  individually  or  under  charters,  presents  a 
situation  which  ocean  carriers  have  been  able  only  par- 
tially to  control  by  means  of  their  agreements  regarding 
rates,  services,  and  divisions  of  traffic  or  profits. 

The  difficulty  of  bringing  the  ocean  traffic  of  any 
large  section  under  the  control  of  a  single  conference^  of 
interested  carriers  is  well  ilhistrated  by  the  North  AtUin- 
tic  steerage  passenger  traffic.  This  traffic,  it  would  seem, 
might  readily  be  controlled.  The  emigrant  business  from 
Europe  is  handled  through  a  comparatively  small  num- 
ber of  ]iorts,  and  the  nundx'r  <•!  lines  equipped  for  the 
steerage  business  is  limited.  jM^evertheless,  the  traffic  is 
so  profitable  that  some  lines  will  always  refuse  to  restrict 
the  management  of  their  business  by  becoming  members 
of  a  conference.  For  a  few  years  previous  to  1903  the 
North  Atlantic  steerage  business  had  been  under  fair  con- 
13 


150     OCEAN    AM)   INLAND   WATER   TRANSPORTATION 

trol,  but  the  outside  lines,  such  as  the  Beaver  Line,  the 
Athmtic  service  of  the  C'anadian  Pacific,  and  especially 
the  Danish  Line,  created  conditions  so  unfavorable  to 
some  of  the  lines  within  the  conference,  that  the  Cunard 
Line  felt  obliged  to  withdraw  from  its  agreement  with 
the  other  members  of  the  conference.  A  most  severe 
traffic  war  to  secure  the  Xorth  American  steerage  busi- 
ness raged  through  the  larger  part  of  11)03-04. 

The  conference  agreements  of  ocean  carriers  are  un- 
stable, partly  because  the  profits  to  be  derived  tempora- 
rily by  any  individual  line  that  may  cut  the  rates,  while 
others  maintain  them,  are  large.  During  times  of  excep- 
tional prosperity,  when  there  is  business  enough  to  employ 
the  facilities  of  all  the  companies,  there  is  little  tempta- 
tion to  deviate  from  conference  agreements;  but  when 
traffic  becomes  scarce  and  profits  rapidly  decline  the 
temjDtation  to  secure  a  temporary  advantage  by  obtaining 
traffic  at  cut  rates  becomes  stronger  than  many  vessel 
owners  are  able  to  withstand. 

Another  reason  why  agreements  among  ocean  carriers 
are  difficult  to  maintain  is,  that  it  is  to  the  interests  of 
shipbuilders  to  construct  and  place  npon  the  market  as 
great  a  tonnage  as  possible.  There  is  a  constant  tendency 
toward  oversupply  of  ocean  shipping.  During  times  of 
])rosperity,  when  there  is  a  denumd  for  a  large  tonnage, 
shipbuilding  expands  rapidly  and  the  activity  of  the  build- 
ers continues  beyond  the  period  of  prosperity,  and  thus 
tends  to  create  an  oversnjiply  of  shipping  during  periods 
when  business  is  not  abnornuilly  active. 

International  rivalries  and  jealonsies  in  the  shipping 
Avorld  also  woi-k  against  the  stability  of  agreements  among 
ocean  carriers.  The  shij)])ing  interests  of  each  country 
are  impelled  by  business  and  i)atriotic  motives  to  develop 
the  shi))])ing  of  their  country  in  ])ref(M-ence  to  that  belong- 
ing to  the  people   of  other  nationalities.      This  spirit   is 


TRAFFIC  AGREEMENTS   OF  OCEAN  CARRIERS  157 

strengthened  by  the  support  given  by  many  countries  to 
the  shipping  interests  of  their  own  people.  As  the  editor 
of  F airplay  remarks,  '"  the  uncertainty  of  the  foreign  fac- 
tor has  been  one  of  the  chief  obstacles  in  the  way  of  com- 
bination among  British  shipo\vners."  What  is  true  of 
British  shipowners  is  equally  true  of  those  of  other 
countries. 

The  instability  of  the  agreements  among  ocean  car- 
riers aifords  the  shippers  and  the  traveling  public  a  safe- 
guard against  extortionate  charges.  If  the  conference 
lines  attempt  to  enforce  high  rates,  the  competition  of 
outside  carriers  will  soon  disrupt  the  agreement,  even  if 
the  lines  within  the  conference  should  refrain  from  cut- 
ting rates.  With  the  exception  of  short  periods  of  un- 
usual business  prosperity,  the  rates  adopted  by  the  con- 
ference must  be  fixed  at  a  point  low  enough  to  cause  rate 
cutting  to  yield  but  slight  profits,  or  no  gain,  to  the  car- 
rier that  violates  the  rate  agreement. 

While  agreements  among  ocean  carriers  are  unstable 
in  all  parts  of  the  world,  they  are  less  unstable  in  Europe 
than  in  the  United  States.  In  Europe,  the  vessels  oper- 
ated as  lines  are  generally  owned  by  the  companies  oper- 
ating them;  whereas  in  the  United  States  the  companies 
operating  lines  frequently  own  but  a  part  of  the  ships 
they  control,  and  charter  or  lease  such  otlier  vessels  as 
they  require.  European  steamship  companies  have  great 
property  interests  at  stake,  and  are  more  disposed  to  ad- 
here to  conference  agreements  than  are  the  American 
companies.  ]\rost  of  the  European  agreements  were  able 
to  outlive  the  period  of  depression  following  the  Boer 
War,  whereas  most  of  the  American  combinations  went 
to  pieces. 

The  older  and  more  liiglily  organized  the  ocean  trans- 
portation service  of  a  country  becomes,  the  greater  the 
stability  of  the  service;  accordingly,  we  may  expect  to 


158     OCKAN    AM)    INLAND   WATER  TRANSPORTATION 

see  the  ocean  tranHi)ortati(>n  l)usincss  jjerformed  by 
American  companies  gradually  brought  under  a  more 
perfect  organization  characterized  by  a  higher  degree  of 
cooperation  among  rival  interests.  This  greater  co- 
operation in  the  ocean  transportation  services  will  be  of 
advantage  both  to  the  carriers  and  the  public. 


REFERENCES  FOR  FURTHER  READING 

"  Highways  of  Commerce."  Special  Consular  Reports,  vol.  xii, 
1899,  Washington,  D.  C.  (This  volume  contains  some  infor- 
mation of  value  regarding  the  classification  of  ocean  freight). 

There  is  practically  no  literature  upon  the  subject  of  agreements 
and  combinations  among  ocean  carriers.  The  material  upon 
which  this  chapter  is  based  was  gathered  mainly  from  the 
files  of  such  shipping  journals  as  Fairplay  and  LloyiVa  (lazettc, 
published  in  London,  and  the  Journal  of  Commerce,  published 
in  New  York.  The  author  desires  to  acknowledge  his  in- 
debtedness to  Dr.  J.  Russell  Smith,  of  the  University  of  Penn- 
sylvania, from  w'hose  notes  much  of  the  information  presented 
in  this  chapter  was  obtained. 


CHAPTER    XII 

COOPERATION  AND  COMBINATION   OF  OCEAN   AND  RAIL 
CARRIERS 

The  constant  interchange  of  a  large  volume  of  traffic 
compels  ocean  and  rail  carriers  to  cooperate.  The  cheap- 
ening in  cost  of  transportation  dnring  recent  decades  has 
enormously  increased  the  tonnage  of  international  com- 
merce. The  markets  for  even  heavy  commodities  have 
hecome  world-wide,  and  the  organization  of  trade  upon 
the  basis  of  a  world  market  renders  more  and  more  neces- 
sary a  close  coordination  of  the  services  of  rail  and  water 
carriers. 

Moreover,  constant  efforts  to  economize  in  the  ex- 
penses of  transportation  are  bringing  about  an  increased 
unity  in  the  organization  of  the  service  of  public  carriers. 
Indeed,  in  the  more  recently  developed  international 
trans])ortation  services,  the  tendency  is  distinctly  toward 
a  single  management  for  the  performance  of  the  entire 
service  of  connecting  the  producers  of  one  country  with 
the  consumers  residing  in  another  country.  There  are 
limits  to  the  devel()])ment  of  this  tendency  toward  unify- 
ing the  control  of  rail  and  water  transportation,  and  it  is 
not  at  all  certain  that  Ijoth  services  shall  everywhere  come 
inider  a  common  management;  but  there  is  no  doul)t  that 
the  coordination  of  rail  aud  water  transportation  will 
become  increasingly  close  witli  tlic  higher  organization  of 
the  trans]K)rtation  business. 

Whether  the  shipper  conducts  his  business  at  the  sea- 

159 


IGO     OCEAN    AM)    IXLAXh    WAT]:R   TRAXSPORTATIOxV 

IxtanI  or  at  .sonic  reiiiolc  interior  point,  lie  is  now  able 
to  ship,  on  tlirongli  bills  of  lading,  by  rail  and  water  car- 
riers, direct  to  the  foreign  destination.  Facilities  for 
such  through  shi^jnients  are  now  provided  by  most  rail- 
road com])anies.  There  are  also  freight  forwarders  and 
exporters  and  iin])oi-ters  not  connected  with  the  railroad 
companies,  and  not  necessarily  connected  with  any  line  of 
steamships,  wlio  not  only  solicit  freight  from  producers 
for  shipment  abroad,  but  also  facilitate  the  importation 
of  goods  produced  in  foreign  countries.  For  these  serv- 
ices the  freight  forwarder  charges  the  shippers  or  buyers 
a  small  commission.  Oftentimes  the  freight  forwarder 
operates  a  line  of  vessels  which  he  may  own  or  charter, 
and  then  his  services  consist  of  securing  traffic  from  many 
interior  and  seaboard  points  for  shipment  abroad  by  his 
own  line  of  vessels.  The  forwarder  also  has  agents  in  for- 
eign countries  soliciting  traffic  to  be  brought  by  his  vessels 
to  the  United  States. 

A  company  engaged  in  forwarding  freight  by  its  own 
line  of  vessels  ordinarily  assembles  and  distributes  most 
of  its  traffic  by  one  line  of  railroad,  in  return  for  which 
the  railroad  company  may  construct  a  pier  to  be  used  ex- 
clusively by  vessels  belonging  to  the  freight  forwarder's 
line;  and  the  railroad  company  may  also  provide  such 
other  terminal  facilities  as  the  forwarder  may  require. 
Such  an  arrangement,  however,  does  not  preclude  the  for- 
warder from  soliciting  freight  from  any  and  all  places  on 
the  lines  of  other  railroads,  nor  from  seeking  traffic  at 
the  terminal  port  from  vessels,  barges,  railroad  companies, 
and  individual  shippers. 

1'he  efforts  made  by  American  railroad  companies  to 
increase  the  over-sea  foreign  commerce  of  the  United 
States  have  had  an  important  influence  upon  the  organiza- 
tion of  the  transportation  service.  In  order  to  secure 
foreign  outlets   for  the   products   of   the   sections   served 


COMBINATION   OF   OCEAN   AND   RAIL  CARRIERS      161 

bv  the  railroads  and  to  increase  the  vohime  of  imports 
of  foreign-made  goods,  and  thereby  to  add  to  the  tonnage 
of  traffic  moved  over  their  lines,  our  railroad  companies, 
particularly  those  leading  to  the  Pacific  ports,  have  estab- 
lished lines  of  steamshi})s  running  to  many  of  the  leading 
foreign  ports. 

The  extent  to  which  the  ocean  transportation  service 
on  the  Pacific  is  performed  by  companies  identified  with 
or  auxiliary  to  the  railroad  corporations,  may  be  shown 
by  referring  to  the  steamship  lines  operated  from  Van- 
couver, the  American  Puget  Sound  ports,  Portland,  and 
San  Francisco. 

The  Canadian  Pacific  Railway-Steamship  Company, 
controlled  by  the  Canadian  Pacific  Railway,  operates  a 
line  of  five  steamers  between  Vancouver  and  the  Orient. 
This  is  an  important  mail  line,  and  is  liberally  supported 
by  the  Canadian  and  British  Governments,  not  only  be- 
cause of  the  mail  service  it  performs,  but  because  it  is 
considered  as  a  military  highway  to  India.  This  ocean 
line  was  inaugurated  as  soon  as  the  Canadian  Pacific 
reached  Vancouver;  at  first  chartered  vessels  were  used, 
l)ut  later  the  present  excellent  steamers  were  purchased 
by  the  company.  The  Canadian  Pacific  interests  also  op- 
crate  from  Vanconver  ;;n  Australian  line  of  two  chartered 
vessels,  which  arc  run  in  c()0])eration  with  the  Union 
Steamship  Company  of  i\ew  Zealand,  tlic  vessels  of  the 
two  companies  being  dispatched  on  alternate  sailings. 

At  Seattle  there  are  four  important  steamship  lines, 
two  of  which  are  controlled  by  American  railroads.  One 
of  these  lines  is  operated  by  the  Great  jSTorthcrn  Steam- 
ship C^ompany,  the  celebrated  vessels,  the  Minnesota  and 
Dal-ota,  being  employed  in  this  service.  The  Great 
Northern  Steamship  Company  operates  its  vessels  upon  a 
schedule  of  sailings  alternating  with  the  sailings  of  the 
vessels  belonging  to  the  Xippon  Yusen  Kaisha  (Japanese 


102     Of'IOAN   AND   INLAND   WATP:R  TRANSPORTATION 

Steaiiislii|i  ( 'oiiipjiny).  The  two  companies  do  not  pool 
their  cariiiiii^s,  but  act  in  liarmony  as  regards  rates,  dates 
of  sailings,  and  other  niattei's  of  coninion  interest. 

The  Nortliern  Pacific  Steamship  Company  operates 
tlire(>  vessels  l)etween  Pnget  Sound  pcn-ts  and  Hongkong, 
having  alternate  sailings  with  tiie  four  steamers  operated 
hy  the  Boston  Steamship  Company.  The  Northern  Pa- 
cific Company  is  afli Hated  with  the  Northern  Pacific  Rail- 
way. These  vcssids  carry  both  freight  and  passengers, 
])ut  the  ships  oi'  the  Boston  Steamship  Company  are  en- 
gaged only  in  the  freight  service. 

From  Portland,  Ore.,  the  Portland  and  Asiatic  Steam- 
ship Company  operates  a  line  of  vessels  to  Japanese 
and  Chinese  ports.  This  company  has  close  traffic  ar- 
rangements with  the  Oregon  Railroad  and  Navigation 
Company  (a  coastwise  line)  and  the  Oregon  Short  Line 
Railroad.  Both  tlie  Oregon  Navigation  (Vnnpany  and  the 
Oregon  Short  Line  Railroad  belong  to  the  Ilarriman  inter- 
ests, which  also  control  the  Portland  and  Asiatic  Steamship 
Company. 

From  San  Francisco  there  are  five  lines  of  vessels  op- 
erated to  Oriental  ports  and  one  line  to  Anstralia.  Of 
the  several  lines  to  Oriental  ports,  two  of  the  fonr  impor- 
tant lines  are  the  Pacific  Mail  and  the  Occidental-Oriental 
Companies  control  led  l)y  the  Southern  Pacific  Railroad 
interests.  A  third  line  is  the  Toyo  Kisen  Kaisha,  con- 
trolled by  Ja])anese  capitalists,  and  a  fourth  is  the  China 
Commercial  Line,  a  i>ritisli  corporation. 

The  history  of  the  relations  of  the  Pacific  Mail,  the 
Occidental-Oriental,  and  the  Toyo  Kisen  Kaisha  lines,  is 
most  interesting.  The  Pacific  Mail  began  its  over-sea 
services  in  1809,  at  the  time  of  the  completion  of  the  first 
Pacific  railroad.  Five  years  later  this  first  Pacific  rail- 
road, the  LTnion  and  Central  Pacific  Line,  became  dissatis- 
fied with  the  arrangement  it  had  with  the  Pacific  Mail, 


COMBINATION  OF  OCEAN   AND   RAIL  CARRIERS      163 

and  consequently  chartered  four  vessels  belonging  to  tlic 
White  Star  Line,  and  established  the  Occidental-Oriental 
Steamship  Company.  A  severe  rate  war  between  the  two 
companies  ensued,  with  great  loss  to  both,  followed  by 
an  agreement  regarding  rates,  schedules,  and  other  con- 
ditions of  the  service.  The  two  companies  established 
joint  agencies,  and  took  steps  to  prevent  rate  cutting  and 
discriminations;  they  worked  separately,  but  in  friendly 
competition.  In  the  early  nineties  the  Southern  Pacific 
purchased  the  Pacific  Mail,  and  thus  brought  the  two  com- 
panies under  the  same  control.  In  the  later  nineties  the 
Toyo  Kisen  Kaisha  announced  its  intention  of  engaging 
in  the  traflic  between  Japan  and  San  Francisco.  The 
Southern  Pacific  interests  decided  to  avoid  a  rate  war  by 
entering  into  a  traffic  agreement  ^\ath  the  new  competitor, 
and  the  three  lines  are  now  worked  in  harmony. 

The  Oceanic  Steamship  Line,  from  San  Francisco  to 
Australia  by  way  of  Honolulu  and  New  Zealand,  is  appar- 
ently not  under  railroad  control.  From  1875  to  ISS!)  the 
Pacific  Mail  had  an  Australian  service;  but  in  1889  the 
Pacific  Mail  ceased  running  its  vessels  to  Australia,  and 
since  then  the  Canadian  Pacific  Mail  from  Vancouver  and 
the  Oceanic  Line  from  San  Francisco  have  had  control  of 
the  Australian-American  business. 

The  coastwise  traffic  of  our  Pacific  States  is  also  largely 
handled  by  lines  controlled  by  the  railroads.  The  Oregon 
Railroad  and  Navigation  Company,  mentioned  above,  con- 
trolled by  the  Harriman  interests,  is  one  of  the  coastwise 
lines.  Another  important  one  is  that  operated  by  the 
Pacific  Coast  Steamship  Company,  controlled  by  the  Great 
Northern  Railway  interests.  The  vessels  of  this  company 
touch  at  all  the  important  points  from  Victoria  and  Seattle 
on  the  north  to  Guaymas  and  Mazatlan  in  Mexico.  The 
most  important  Pacific;  coastwise  line  is  that  operated  by 
the  Pacific  Mail  Steamship  Company,  with  its  large  traffic 


164     OCEAN   ANIJ   INLAND   WATER  TRANSPORTATION 

between  San  Francisco  and  Panama,  including-  tlie  traffic 
of  intermediate  ])oints  in  Mexico  and  (Central  America. 
The  export  trade  from  our  Pacific  coast  to  Europe  is 
mainly  controlled  by  British  and  German  lines;  these  for- 
eign coni])anies  are  not,  however,  permitted  by  our  laws  to 
engage  in  the  American  coastwise  trade. 

In  the  commer(;e,  both  foreign  and  coastwise,  of  the 
Atlantic  and  Gulf  coasts,  the  coordination  of  the  ocean  and 
rail  carriers  is  less  complete  than  on  the  Pacific  seaboard. 
The  reasons  for  this  are  both  historical  and  economic. 
The  ocean  transportation  service  across  the  IsTorth  Atlantic 
was  well  organized  and  highly  developed  long  before  the 
railroads  began  to  carry  a  large  volume  of  trafiic  for 
export.  As  the  railroads  have  increased  this  traffic  they 
have,  in  the  main,  made  use  of  previously  existing  ocean 
carriers,  who  have  developed  their  facilities  with  the 
growth  of  the  tonnage  turned  over  to  them  by  the  rail- 
roads. ]\Ioreover,  the  tonnage  of  the  North  Atlantic  traffic 
is  so  large,  and  the  variety  of  commodities  handled  is  so 
great,  that  ocean  transportation  facilities,  independent  of 
the  railroads,  are  readily  provided. 

The  trade  of  a  great  port  like  Xew  ^"ork  reaches  out 
to  all  jiarts  of  the  world,  and  includes  not  only  the  com- 
merce of  the  large  foreign  ports  with  which  there  is  a  heavy 
and  regular  volume  of  trade,  but  also  the  suuiller  and 
more  out-of-the-way  foreign  sources  of  our  international 
trade.  To  handle  such  a  commerce  as  Xew  Vork  city 
has,  special  ocean  carriers  are  necessary;  there  is  need  not 
only  for  a  few  large  steamship  lines  such  as  the  railroad 
interests  might  provide,  but  also  of  the  services  of  smaller 
lines  and  independent  vessels.  This  fact,  together  with 
the  historical  reason  just  given,  explains  why  the  vast 
foreign  trade  of  Xew  York  is  handled  by  carriers  inde- 
pendent of  our  great  railway  systems. 

The  situation  in  the  Atlantic  ports  of  the  United  States 


COMBINATION  OF  OCEAN   AND   RAIL  CARRIERS      165 

other  than  Xew  York  is  different,  and  several  steamship 
lines  from  the  "  ont-ports  "  are  operated  bv  or  in  affiliation 
with  railroad  companies.  From  Xewport  iSTews,  the 
Cliesapeake  and  Ohio  Railway  Company  operates  a  steam- 
shi])  line  to  Liverpool  and  London.  From  the  port  of 
Philadelphia,  the  Reading  Railway  Company  operates  the 
Philadelphia  Transatlantic  Line  to  London  and  Avon- 
month.  Formerly  the  Pennsylvania  Railroad  Company 
controlled  the  American  Line  whose  vessels  now  rnn  to 
Liverpool  and  Sonthampton,  hnt  this  line  has  now  passed 
nnder  the  control  of  another  gronp  of  capitalists. 

When  the  American  Line  started,  in  1871,  it  was 
owned  by  individnals  interested  in  the  Pennsylvania  Rail- 
road, and  the  bonds  of  the  company  were  gnaranteed  by 
the  Pennsylvania  Railroad;  twenty  years  later  the  Amer- 
ican Line  passed  under  the  control  of  the  Liternational 
N^avigation  Company,  also  managed  by  individnals  more 
or  less  closely  connected  with  the  Pennsylvania  Railroad. 
The  Liternational  Xavigation  Company  was  established  to 
carry  traffic  between  Philadelphia  and  Antwerp,  and 
althongh  the  company  had  no  official  connection  with  the 
Pennsylvania  Railroad,  the  business  relations  of  the  two 
companies  were  friendly  and  close.  Li  1902  the  Interna- 
tional Navigation  Company — including,  of  course,  the 
American  Line — was  purchased  by  the  International  Mer- 
cantile Marine  Company,  composed  of  a  large  group  of 
capitalists,  American  and  foreign.  The  Pennsylvania 
Railroad  no  longer  has  even  unofficial  control  of  any  ocean 
steamship  line. 

The  foreign  commerce  of  Boston  and  Portland  is  ap- 
parently handled  by  steamships  indejiendent  of  railroad 
control;  farther  north,  however,  the  Canadian  Pacific 
Railway  has  a  transatlantic  line,  which,  together  with  nu- 
merous steamship  companies  independent  of  the  railroads, 
carries  on  the  trade  of  Canada  with  Europe. 


166     OCEAN   AND   INLAND   WATER  TRANSPORTATION 

The  coastwise  traffic  of  the  Atlantic  and  Or.lf  seaboard 
ports  of  the  riiitcd  States  is  liandh-d  inaiidy  Ijv  three 
different  groups  of  carriers: 

1.  Tlie  steamship  lines  which  do  a  general  freight  and 
passenger  business.  AVliilc  there  are  several  important 
coastwise  steamship  lines^  tlieir  number  is  relatively  small, 
considering  the  volume  of  business. 

2.  The  vessels  operated  by  companies  engaged  in  the 
mannfacture  and  sale  of  lumber.  The  large  lumber  traffic 
coastwise  is  handled  mostly  by  the  lumber  companies. 

?).  There  is  a  heavy  barge  traffic  in  coal,  especially  from 
Norfolk  and  l^ewport  Xews  northward.  This  coal  traffic 
is  handled  ]inrtly  by  individual  carriers. 

As  the  railrcnid  companies  are  not  engaged  in  the  man- 
nfacture and  sale  of  lumber,  there  is  no  connection  be- 
tween the  railroads  and  the  transportation  of  lumber  coast- 
wise. Several  of  the  railroad  companies  leading  to  the 
ISTorth  Atlantic  seaboard  are  large  owners  and  miners  of 
anthracite  coal.  The  Philadelphia  and  Reading  Hallway, 
the  largest  coal  road,  has  an  extensive  coastwise  service. 
In  the  case  of  the  other  hard-coal  roads  there  is  no  direct 
connection  between  the  railroad  companies  and  the  coast- 
wise tratlic  in  coal.  The  railroads  do  not  engage  in  tlie 
coastwise  transjiortation  of  soft  coal,  and  the  individual 
com])anies  which  conduct  this  coastwise  coal  transportation 
are  distinct  from  the  rail  carriers;  but  the  influence  of  the 
raih'oad  com])anies  npon  the  business  of  moving  coal  by 
water  amounts  in  many  instances  to  a  virtual,  though  in- 
direct, control. 

Thei-e  !ire  two  im]iortant  coastwise  lines  owned  and 
cdutrollcd  by  railroad  ('om))anies.  The  larger  one  of  these 
two  is  the  Morgan  Line,  wliich  (»])('rntt's  a  large  fleet  of 
vessels  between  ISTew  York  and  Xew  Orleans  and  Galves- 
ton. The  other  distinctively  railroad  coastwise  steamship 
line  is  the  Old  Colony  Steand)oat  Company,  controlled  by 


COMBINATION   OF   OCEAN  AND   RAIL  CARRIERS      167 

the  New  York,  Xew  Haven  and  Hartford  Railroad.  This 
line  connects  New  York  with  Providence,  Fall  River,  and 
other  New  Enp,-]and  ports.  Most  of  the  general  steamship 
lines  engaged  in  coastwise  business  are  managed  by  com- 
panies independent  of  railroad  domination.  It  is,  however, 
generally  understood  in  financial  circles  that  several  of  the 
steamship  lines  are  controlled  by  men  who  have  important 
holdings  in  the  stocks  of  our  Eastern  railroad  systems. 

The  vast  coa^Jtwise  trade  of  our  Great  Lakes  is  largely 
handled  by  vessels  belonging  either  to  the  United  States 
Steel  Corporation,  the  Standard  Oil  Company,  or  the  rail- 
roads having  lake  connections.  The  Grand  Trunk,  the 
New  York  Central,  the  Erie,  the  Lehigh  Valley,  the  Dela- 
ware, Lackawanna  and  Western,  the  Pennsylvania,  the 
Baltimore  and  Ohio,  and  the  Great  Northern  railroad 
companies  have  lines  of  steamers  operated  on  the  Groat 
Lakes  for  the  purpose  of  enabling  the  railroad  companies 
to  participate  more  advantageously  in  the  connnerce  orig- 
inating and  terminating  in  the  region  about  the  Great 
Lakes. 

The  policy  of  the  British  railroad  companies  has  been 
to  establish  steamship  lines  from  the  British  Isles  to  the 
leading  Continental  ports.  The  cooperation  of  rail  and 
ocean  carriers  is  more  complete  in  the  United  Kingdom 
than  in  America.  Although  the  British  railroad  com- 
panies, like  most  of  the  American  railroads  serving  the 
Atlantic  ports  of  the  Ignited  States,  have  not  found  it 
necessary  to  establish  transatlantic  lines,  the  British  rail- 
roads have  found  it  advantageous  to  provide  facilities  for 
the  direct  and  speedy  handling  of  traffic  between  interior 
points  in  the  United  Kingdom  and  (Continental  ports. 
Traffic  both  wnthin  the  United  Kingdom  and  between  the 
United  Kingdom  and  the  Continent  is  divided  up  terri- 
torially among  the  leading  railway  companies  and  their 
steamship  lines;   and   excellent   facilities   have   been   de- 


1()S     OCEAX   AND    IM.AM)   WATER  TRANSPORTATION 

veluped  for  ciiiTviiii;  nil  t  lie  ai'cat  trade  between  the  lii-itisli 
Isles  and  llie  <  '<>iiiiiiciil;il  (••dinti'ies  of  Enroiic. 

Tlie  corii'diiialinn  ai'  1  lie  rail  and  ocean  transportation 
services  is  heconiinu'  inci'easin£2,'ly  close,  'llii-  higher  de- 
ji'ree  nf  (•(M'li'dinal  ion  will  he  an  advanlai:!'  tn  llic  slii|)|)er, 
nnless  il  results  in  ai\ini;'  I  lie  carrier  a  iiioiKipoly  tliat 
enaMcs  liini  to  charu'e  nnreasonalilx'  liii^li  I'atc-  and  to 
restrict  his  services  to  the  more  protitaMe  hraiiches  of 
trafHc.  The  shi|)pei',  lio\ve\-er,  is  in  little  daniicr  of  suf- 
ferins;'  from  monopoly  in  the  ocean  transportation  service, 
bccans(^  the  all-pervadini>-  competition  prevailin*!;  on  the 
ocean  aives  the  shi[)per  a  safeguard  against  extortion,  as 
far  as  ocean  transportation  charges  are  concerned. 

The  growing  consolidation  of  railroads  may  well  give 
the  shipping  public  some  concern,  because  the  scope  of 
competition  among  land  carriers  can  be  largely  restricted 
by  monopoly  and  combination  of  rival  railroads.  Indeed, 
the  interests  of  the  shipper  require  that  the  influence  of 
competition  upon  railway  charges  should  be  supplemented 
by  an  intelligent  governmental  regulation  of  the  railroad 
service;  but  with  competition  to  safeguard  his  interests 
upon  the  ocean,  and  with  real  governmental  regulation  of 
the  railroad  service,  the  shipper  may  welcome  the  fullest 
measure  of  cooperation  among  rail  and  ocean  carriers. 

REFEEEXCES  FOK  FURTHER  READIXG 

The  information  presented  in  this  chapter  was  mostly  obtained  by 
Dr.  J.  Russell  Smith,  IMr.  Thomas  Conway,  Jr.,  and  the  author, 
by  correspondence  and  interviews  with  men  engaged  in 
shipping.  There  is  little  printed  literatm-e  upon  the  subject 
of  the  cooperation  and  combination  of  rail  and  ocean  carriers. 
Some  fragmentary  data  may  be  obtained  from  the  Annual 
Reports  of  the  Commissioner  of  Navigation,  Washington,  D. 
C,  and  from  the  "List  of  Steamer  Lines  Plying  between  Ports 
of  the  United  States  and  Foreign  Ports,"  ('()m]:)iled  b}'  the 
Bureau  of  Statistics,  and  j)ublished  in  the  Monthh/  Sunwtary 
of  Commerce  and  Finance  of  the  United  States,  August,  1903. 


CHAPTEK    XIII 


OCEAN    FARES    AND    RATES 


Ocean  fares  and  rates  mchido  tlie  eliarg'es  for  carrying 
tlie  mails,  conveying  passengers,  and  transporting  vai'ions 
kinds  of  freight.  The  purpose  of  this  chapter  is  to  exphain 
liow  the  charges  for  each  service  are  fixed  and  maintained, 
and  to  discuss  the  influence  of  competition;  to  show,  in 
other  words,  how  the  forces  discnssed  in  the  two  preceding 
chapters  operate  in  the  making  and  regulation  of  ocean 
transportation  charges. 

The  payments  received  by  the  steamship  companies  for 
carrying  the  mails  were  explained  in  Chapter  VII,  and 
little  additional  need  be  said.  In  letting  ocean  mail  con- 
tracts the  Government  sometimes  asks  for  competitive 
bids,  and  sometimes,  without  advertising  for  bids,  makes 
arrangements  with  various  companies  in  accordance  with 
the  provisions  of  general  statutes.  Xot  infrequently 
special  laws  authorize  the  execntive  (le]iartment  of  the 
(lovernment  to  negotiate  for  a  pai'ticular  mail  service;  and 
this  is  especially  the  case  where  shi])ping  subsidies  are  in- 
cluded in  mail  payments;  as,  for  example.  Great  Britain's 
coiifract  with  the  (^mard  Stcaiiisliip  Company,  and  the 
contra<'ts  of  the  (Icrnian  Fjmi)ir('  with  the  North  German 
IJoyd  ( 'ompany. 

Mail  payments  are  only  partially  delcrmined  by  couipe- 
tillon.  Practically,  all  govei-nments  ])ay  vessels  of  their 
own  flag  moi-e  for  carrying  the  mails  than  they  pay  or 
would  need  to  pa\'  foreign  vessels.     The  payments  by  the 

169 


170     OCEAN   AND   INLAND   WATER  TRANSPORTATION 

United  States  Post-Office  Department  for  carrying  the 
ocean  mails  under  the  "  noncontract  "  phm  of  payment  are 
an  instance  of  giving  the  domestic  vessel  more  than  the 
foreign  one  for  the  same  service;  and  under  the  contract 
s-ystem,  also,  the  Ignited  States  pays  more  to  American 
ships  for  carrying  the  mails  to  Europe  than  foreign  steam- 
ship companies  would  charge. 

Theoretically,  the  ocean  mail  contracts  let  by  the 
United  States  under  the  Act  of  March  3,  1891,  are  com- 
jjetitive,  the  law  stipulating  that  "  said  contracts  shall  he 
made  with  the  lowest  responsible  bidder,"  and  that  ''  the 
rate  of  compensation  to  be  paid  .  .  .  shall  not  exceed  the 
sum  of  "  four  dollars,  two  dollars,  one  dollar,  and  two 
thirds  of  a  dolhir,  according  to  the  class  of  the  ship,  per 
mile  of  the  outward  voyage;  but  the  number  of  lines  now 
engaged  in  foreign  commerce  under  the  American  flag  is 
so  small,  that  there  is  practically  no  competitive  bidding 
under  the  Act  of  1891,  and  the  sums  paid  by  the  Post- 
master-General for  each  of  the  seven  contracts  in  force 
are  the  maximum  rates  authorized  by  the  law. 

The  most  important  characteristic  of  contracts  for  the 
transportation  of  ocean  mails  is  that  the  payments  cover 
not  only  the  mail  service,  but  also  numerous  other  obliga- 
tions on  the  part  of  the  steamship,  the  purpose  of  the 
country  making  the  contract  being  to  promote  its  mercan- 
tile and  naval  interests.  This  is  equivalent  to  saying  that 
the  basis  of  ocean  mail  payments  is  political  rather  than 
commercial;  that  they  are  determined  primarily  neither 
by  monopcdy  nor  by  competition,  but  by  the  policy  adopted 
by  each  country  to  strengthen  its  industrial,  commercial, 
and  naval  position  among  the  competing  nations. 

Passenger  traffic  is  handled  entirely  by  steamship  lines. 
The  fares  charged  are  competitive,  but  as  the  business  is 
handled  only  by  companies  operating  a  relatively  small 
nundier    of    large    lines    operated    over    well-established 


OCEAN   FARES   AND   RATES  171 

loutes,  the  competing  carriers  are  able  to  regulate  compe- 
tition to  some  extent  by  agreements  as  to  rates,  routes, 
frequency  and  dates  of  sailings,  and  speed.  The  regula- 
tion of  cabin  fares  has  usually  been  found  to  be  relatively 
easy  to  arrange  by  conference  and  agreement  among  com- 
peting lines;  but  in  the  steerage  service  and  charges  it  has 
been  found  more  difficult  to  restrain  competition.  Ocean 
passenger  rate  wars  ordinarily  arise  in  connection  with  the 
steerage  business,  where  the  largest  profits  are  obtainable, 
and  where  the  incentives  to  rate  cutting  or  to  the  invasion 
of  a  rival  line's  territory  are  strongest. 

In  the  development  of  the  ocean  cabin  passenger  serv- 
ice the  policy  followed  has  been  similar  to  the  policy  ad- 
hered to  in  the  development  of  the  American  railway  pas- 
senger business.  In  the  case  of  American  railroads  and 
of  ocean  carriers  the  active  competition  of  rival  lines  has 
resulted  rather  in  a  betterment  of  the  service — greater 
speed,  comfort,  and  luxury — than  in  a  reduction  of  fares. 
Ocean  cabin  passengers  are  able  to  pay  for  an  expensive 
service,  and  their  demand  for  speed  and  comfort  is  stronger 
than  their  demand  for  low  fares.  American  railway  com- 
panies also — whether  wisely,  may  well  be  questioned — 
have,  in  the  main,  adhered  to  the  method  of  attracting 
traffic  by  improving  the  service  rather  than  by  providing 
an  inexpensive  and  slow  service  at  low  fares;  consequently 
railroad  passenger  fares  have  declined  very  slowly  in  the 
United  States.  Likewise,  cal)in  fares  on  the  ocean  have 
not  been  lowered  with  the  mechanical  progress  of  ocean 
transportation.  Instead  of  giving  the  passenger  the  same 
speed  and  comfort  at  declining  fares,  tlie  tendency  has  been 
to  give  him  a  shorter  voyage  and  moi'o  luxurious  accommo- 
dations at  the  same  or  a  higher  fare. 

In  the  management  of  the  third  class,  or  steerage 
traffic,  the  steamship  companies  have  improved  the  service 
greatly  and  have  lowered  the  fares.  The  com])etition  of 
13 


172     OCEAN   AND   INLAND   WATER  TRANSPORTATION 

the  JS'ortli  Atlantic  lines  for  the  steerage  traffic  has  been 
keen  and  persistent,  beeanse  the  l)nsiness  has  been  profit- 
able and  has  increased  with  great  rapidity.  To  stimulate 
this  profitable  traflfic  and  to  hold  it  against  competitors, 
•the  leading  steamship  companies,  particularly  during  the 
past  ten  years,  have  given  the  steerage  passengers  the  ad- 
vantage of  speed,  and  have  made  their  accommodations  in- 
comparabh^  more  comfortable  than  they  were.  The 
growth  of  the  traffic  has  been  so  rajiid  that  the  steamship 
companies  have  been  able  to  provide  this  better  steerage 
service  at  declining  fares,  and  have  thus  been  able  to  add 
to  the  volume  of  steerage  traffic  by  offering  both  mod- 
erate fares  and  a  speedy,  comfortable  service  to  the 
working  classes  of  Europe  ambitious  to  better  their  con- 
dition by  emigrating  to  America  or  Australia. 

The  rivalry  of  ocean  carriers  in  the  freight  service 
being  keener  than  for  the  passenger  traffic,  freight  rates 
are  more  strongly  competitive  than  are  passenger  fares. 
The  main  reason  for  this  is  that  the  passenger  business 
is  handled  by  a  limited  number  of  steamship  lines,  where- 
as the  greater  tonnage  of  the  freight  traffic  may  be  trans- 
ported either  by  line  vessels  or  by  chartered  ships,  steam 
and  sail,  which  have  no  fijxed  routes  and  schedules,  and 
are  thus  free  to  bid  for  traffic  wherever  it  may  be  found. 

Competition  in  ocean  freight  rates  is  stronger  and 
more  general  than  in  railroad  rates.  Dr.  J.  Russell 
Smith  explains  this  by  stating  that  "  the  most  fundamen- 
tal difference  between  ocean  transportation  and  land 
transportation  as  typified  by  the  railroad  is  in  the  element 
of  fixed  capital,  the  roadbed  and  terminal  facilities,  which 
are  so  all-important  with  the  railroad,  and  upon  which  the 
steamship  company  spends  so  little.  This  may  be  called 
the  organic  difference  between  the  two.»  It  profoundly 
affects  the  making  of  rates,  for  the  railroad  has  a 
tendency  to  combination,  monopoly,   or   agreement,  re- 


OCEAN  FARES  AND  RATES  17;3 

suiting  in  fixed  and  settled  rates,  while  the  ocean  is  free, 
oi^en  to  competition,  and  the  scene  of  ever-shifting 
rates."  ' 

The  ioossibility  of  limiting  competition  in  railway  rates 
is  greater  than  in  ocean  rates,  and  the  railroad  service  is 
more  monopolistic  than  ocean  transportation.  Even  in 
the  railroad  business,  however,  there  are  competitive 
forces  influencing  charges — forces  that  persist  even  among 
consolidated  railroads  - — and  the  railroad  service  is  a  par- 
tial rather  than  a  complete  monopoly.  In  the  ocean 
transjDortation  service,  agreements  or  even  combinations 
of  carriers  are  less  potential  over  rates  than  are  railroad 
consolidations.  Competition  on  the  ocean  is  more  force- 
ful, rates  change  frequently,  and  correspond  in  general 
with  the  ratio  of  traffic  to  shipping  facilities. 

In  studying  ocean  freight  rates  it  is  necessary  to  keep 
in  mind  that  ocean  freight  traffic  consists  of  two  distinct 
kinds:  (a)  full  vessel  cargo  shipments,  and  (h)  partial  (or 
"  berth  ")  cargo  and  "  line  "  or  general  cargo  freight. 
The  rates  for  these  two  kinds  of  shipments  are  controlled 
by  different  forces. 

(a)  When  commodities  are  shipped  as  full  vessel  car- 
goes the  freight  charges  consist  of  the  rent  paid  for  the 
use  of  the  vessel  "  chartered  "  to  perform  the  service. 
Rates  on  full  cargoes  are  called  charter  rates.  Vessels 
may  be  chartered  either  (1)  for  a  single  or  round-trip 
voyage,  or  (2)  for  a  definite  period  of  time — thirty  days, 
six  months,  or  a  year;  hence  there  are  "trip  charters" 
and  "  time  charters."  The  ordinary  payment  for  a  trip 
charter  is  a  certain  rate  per  ton  on  the  cargo,  or,  if  grain, 
a  certain  rate  per  bushel,  per  hundred,  or  quarter;  while 
the  basis  upon  which  the  payment  for  time  charters  rests 

^  "The  Organization  of  Ocean  Commerce,"  p.  34. 
-  Consult  the  author's  volume  on  "American  Railway  Transporta- 
tion," Chapter  XVIII. 


174     OCEAN   AiND   1^•LA^'U  WATER  TRANSPORTATION 

is  the  tonnage  of  the  vessel,  the  rate  being  a  certain 
anionnt  per  vessel  ton  per  month.  A  blank  "  Charter 
Party  "  is  reproduced.  This  is  the  contract  executed  when 
a  vessel  is  chartered  to  carry  a  cargo  of  grain. 

I'hc  chartered  xcssel  is  leased  to  the  shi])per  l)v  the 
owner,  who  also  (i|)ei':ites  the  vessel,  j)rovides  the  crew, 
supplies  the  food  and  fuel,  and  keeps  the  vessel  in  repair. 
In  the  case  of  trip  charters,  the  owner  pays  all  the 
expenses  of  operation,  including  port  charges  for  clearing 
and  entering  the  vessel,  and  the  shipper  pays  only  the 
freight  charges  agreed  upon  in  the  charter  contract.  The 
provisions  of  time  charter  contracts  vary,  but  ordinarily 
the  owner  supplies  and  provides  for  the  crew  and  keeps 
the  ship  in  repair,  while  the  charterer  furnishes  the  fuel 
and  pays  the  port  and  terminal  charges.  The  rate  paid 
per  vessel  ton  per  month  for  time  charters  will,  of  course, 
depend  upon  the  obligations  assumed  by  the  owner  and 
by  the  charterer. 

'No  prices  could  be  more  competitive  than  charter 
rates;  they  fluctuate  with  every  slight  change  in  the  ratio 
of  traffic  to  shipping.  There  is  a  world-wide  competition 
among  vessel  owners  to  secure  desirable  cargo  shipments 
— a  competition  that  is  made  possible  by  means  of  ship 
brokers  who  are  to  be  found  in  all  large  cities,  and  who 
are,  by  means  of  the  network  of  telegraph  and  cable  lines 
that  bind  together  all  commercial  centers,  kept  in  touch 
with  each  other  and  with  the  shippers  having  cargoes  for 
transportation.  The  nature  of  the  competition  in  charter 
traffic,  and  the  work  of  the  shipbroker,  are  graphically 
described  as  follows  by  Dr.  Smith,  in  his  work  on  "  The 
Organization  of  Ocean  Commerce  ": 

The  method  of  securino;  cargoes  for  ships,  and  ships  for  cargoes, 
is  best  described  by  the  relation  of  some  common  incident  of  every 
day  occurrence.  A  Liverpool  shipowner  had  a  steamer  in  the 
Mediterranean  loaded  with  jute,  winch  she  was  carrjdng  from 


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178     OCEAN   AND   INLAND   WATER  TRANSPORTATION 

Calcutta  to  Dundee.  The  owner  desired  another  cargo  for  the 
steamer  at  the  end  of  the  voyage.  Knowing  that  there  was  nothing 
in  Dundee,  he  wrote  to  his  agent  in  Newcastle,  and  himself  made 
imiuirics  iunong  the  shi[){)crs  of  Livcr])()ol.  The  Newcastle  man 
suggcs((>(l  a  cargo  of  (loal  to  Hamburg,  but  it  was  declined,  and  he 
sought  the  aid  of  his  correspondent  in  Dumbarton,  but  the  iron  trade 
of  Diunbarton  was  not  promising.  Meanwhile  the  days  were  pass- 
ing, the  vessel  had  reached  Dundee,  and  there  was  nothing  provided 
for  her.  The  Liverpool  man  was  himself  the  correspondent  of  a 
London  firm  of  shipbrokers,  who  telegraphed  him  at  this  juncture 
that  they  had  offers  of  a  shipment  of  (lerman  coke  to  gf)  from 
Rotterdam  to  Santa  Rosalia,  Lower  California,  and  of  another  of 
Cardiff  coal  for  Buenos  Ayres.  The  first  the  shipowner  declined, 
as  being  suitable  only  for  a  sailing  vessel,  and  because  of  news  from 
across  the  Atlantic  he  allowed  the  second  to  go  to  a  steamer  then 
lying  at  Antwerp.  Three  days  before  this  he  had  cabled  to  his 
New  York  correspondent  a  description  of  the  steamer,  and  offering 
her  services  to  carry  grain  to  the  United  Kingdom  at  a  certain 
rate,  and  saying  that  she  could  load  after  a  certain  date  or  between 
certain  dates.  As  New  York  freight  was  dull,  the  firm  in  that 
city  telegraphed  their  Boston  and  Philadelphia  agencies.  At  the 
same  time  a  Chicago  grain  exporter  decided  to  export  L50,C)00 
bushels  of  corn,  and  telegraphed  to  his  agents  in  New  York  and 
Philadelphia  to  secure  offers  of  transportation.  In  the  shipping 
exchanges  of  those  cities  the  representatives  of  the  Chicago  ex- 
porter and  the  Liverpool  shipowner  bargained  face  to  face.  Offers 
vv^ere,  however,  made  at  the  same  rate  by  the  New  York  represent- 
ative of  the  owner  of  a  ship  then  off  Rio  Janeiro  with  a  cargo  of 
Chilean  nitrate  bound  for  New  York,  and  also  by  a  Philadelphia 
broker  who  sought  future  emploj'ment  for  a  vessel  then  in  the  Red 
Sea  with  a  cargo  of  Java  sugar  for  Philadelphia.  The  Liverpool 
owner  was  informed  of  this  competition,  and  still  having  nothing 
for  his  steamer,  he  cabled  that  he  would  charter  his  ship  for  three- 
pence (six  cents)  less  per  ton,  or  for  the  same  rate  he  would  take 
freight  to  continental  ports  as  far  as  Copenhagen.  He  added  to 
his  cablegi'am  the  word  "range,"  which  means  in  cable  code  that 
he  would  send  the  ship  to  Delaware  Bay  with  the  understanding 
that  she  might  be  ordered  to  New  York,  Philadelphia,  Baltimore, 
or  Norfolk,  to  load.  This  offer  secured  the  freight,  for  the  repre- 
sentatives of  the  sugar  ship  and  the  nitrate  ship,  having  more  time 


OCEAN   FARES  AND  RATES  179 

at  their  disposal,  preferred  to  take  chances  rather  than  cut  rates. 
The  steamer,  which,  pending  negotiations,  was  still  lying  at  Dundee, 
proceeded  to  Newcastle  to  coal,  and  departed  thence  in  ballast  for 
th(^  Delaware.  Meanwhile  the  Chicago  exporter  found  that  rail- 
road conditions  made  Norfolk  the  most  convenient  i)ort  to  deliver 
his  corn  at  the  appointed  time.  When  the  steamer  reached  the 
Delaware  Breakwater  (just  inside  Cape  Henlopen)  the  captain  re- 
ceived telegrapMc  instructions  to  go  to  Norfolk.  There  he  loaded 
a  full  cargo  of  corn,  and  as  the  final  destination  of  the  corn  was  still 
undecided,  he  sailed  to  the  Channel  i)ort  of  Falmouth  for  orders. 
There  he  was  instructed  by  signal  to  proceed  to  CopenhagcMi,  where 
the  corn  was  discharged,  and  the  vessel  was  ready  for  another  con- 
tract which  the  agents  had  been  trying  to  arrange  since  the  day 
they  learned  of  the  final  destination  of  the  corn  cargo. 

(h)  General  freight  dispatched  in  small  qnantities,  or 
in  less  than  fnll  cargoes,  is  shipped  at  a  certain  rate  i)er 
ton,  weight,  or  measurement.  Such  freight  is  ordinarily 
handled  by  line  vessels  having  regular  routes  and  sched- 
ules of  sailings;  but  this  is  not  always  tlie  case,  for  it  fre- 
quently happens  that  both  chartered  and  line  vessels  may 
seek  shipments  of  small  quantities  to  complete  the  lading 
of  the  ships,  or  shipments  of  some  special  kind  of  a  com- 
modity needed  as  a  complement  to  the  main  cargo.  A 
vessel  loading  with  cotton  will  gladly  take  a  part  cargo 
of  steel  rails  or  pig  iron  to  place  in  the  bottom  of  the 
vessel;  and  vice  versa,  a  ship  whose  chief  cargo  is  heavy 
freight,  will  welcome  shipments  of  a  light  and  bulky  cliar- 
acter  that  will  take  up  the  unoccupied  space  with  profit- 
able cargo. 

This  search  for  freight  to  complete  or  complement 
the  cargo  of  a  chartered  or  line  vessel  introduces  bargain- 
ing methods  into  tlie  making  of  rates  on  at  least  a  ])art 
of  the  freight  shipped  as  general  cargo.  The  same  vessel 
frequently  will  carry  not  only  many  kinds  of  connnodities 
at  a  different  rate  for  each  class  of  articles,  l)ut  will  also 
carry   the   same   commodity   or  class   of  connuodities    at 


180     OCEAN   AND  INLAND   WATER  TRANSPORTATION 

various  rates  for  different  shippers,  the  rate  granted  by 
the  carrier  being  fixed  by  special  bargain,  and  determined 
by  the  urgency  of  the  carrier's  desire  to  secure  the  par- 
ticular shipment  in  question. 

To  some  extent  commodities  shipped  as  general  cargo 
are  classified.  When  ocean  traffic  is  classified  the  rates 
vary  with  classes,  all  articles  in  a  single  class  having  the 
same  rate  when  shipped  to  the  same  point.  However, 
the  classification  of  ocean  traffic,  for  reasons  that  have 
already  been  explained,  comprises  but  a  relatively  small 
part  of  the  articles  and  the  tonnage  transported  in  mari- 
time commerce.  For  the  greater  share  of  ocean  tonnage 
the  rates  are  for  articles  rather  than  for  classes. 

Ordinarily,  general  cargo  is  shipped  at  the  competitive 
rates  prevailing  at  the  time  of  the  shipment  for  the  ar- 
ticles offered  to  the  carrier  for  transportation.  Carriers 
directly  and  through  their  agents  solicit  freight  in  all  the 
large  industrial  and  commercial  centers,  and  rival  carriers 
compete  in  the  rates  they  offer  shippers.  This  compe- 
tition tends  to  become  so  severe  as  to  destroy  profits,  ex- 
cept during  periods  of  unusual  business  prosperity,  and 
vessel  owners  seek  to  regulate  their  rivalry  by  means  of 
the  '^  conferences,"  rate  agreements,  and  rebates  to  ship- 
pers, as  described  in  a  previous  chapter. 

Conference  agreements,  as  has  been  explained,  are 
applicable  mainly  to  the  line  traffic  of  special  routes  or 
of  certain  traffic  areas;  they  have  as  yet  included  only  a 
limited  share  of  the  total  maritime  commerce  of  the 
world,  and,  where  established,  the  conference  agreements 
have  required  frequent  amendment  or  reconstruction. 
The  "  conferences  "  have  regulated  rather  than  eliminated 
competition  in  that  minor  portion  of  the  world's  commerce 
to  which  they  have  been  applied.  The  regulation  accom- 
plished by  the  conferences  has  on  the  whole  been  advan- 
tageous both  to  shippers  and  carriers,  because  the  agree- 


OCEAN  FARES  AND  RATES  181 

ments  of  rival  lines  have  made  ocean  rates  somewhat 
more  stable,  without  being  able  to  make  the  rates  extor- 
tionate. The  forces  of  competition  pervade  the  ocean 
transportation  service,  and  protect  even  the  shippers 
whose  traffic  is  covered  by  conference  agreements  of  rival 
ocean  carriers. 

A  minor  portion  of  the  freight  handled  as  line  traffic 
is  taken  at  rates  fixed  by  time  contracts  between  large 
sliippers  and  freight  forwarders  or  carriers.  The  man- 
ager of  a  line  of  vessels  is  glad  to  secure  freight  in 
advance,  because  a  steady  volume  of  traffic,  even  at  mod- 
orate  rates,  is  ordinarily  more  profitable  than  a  fluctuating 
tonnage  at  current  rates.  The  manufacturer  or  exporter 
engaged  largely  in  the  foreign  trade  can  carry  on  his 
business  more  advantageously  if  he  has  an  advance  guar- 
antee of  the  shipping  facilities  his  traffic  will  require  week 
by  week  or  month  by  month,  and  if  he  knows  what  freight 
rates  he  will  have  to  pay  to  place  his  products  upon  the 
foreign  market.  The  time  contracts  between  shipper  and 
carriers  cover  various  periods — a  month,  a  season,  or  a 
year — and  stipulate  that  the  carrier  shall  provide  facil- 
ities for  transporting  a  designated  tonnage  of  the  ship- 
per's wares  or  products  at  such  dates  and  at  such  rates 
as  are  named  in  the  agreement. 

A  shipment  amounting  to  less  than  a  full  cargo,  or 
aggregating  only  a  few  hundred  tons,  may  frequently  be 
shipped  as  "  berth  cargo."  A  line  vessel  loading  at  such 
a  port  as  New  York,  for  example,  may  have  miscellaneous 
and  profitable  freight  enough  to  occupy  three  fourths  of 
the  vessel,  but  not  enough  to  complete  the  lading.  Such 
a  vessel  will  offer  "  berth  "  space  to  an  exporter  of  grain 
or  some  bulky  freight  at  low  rates.  Ordinarily  the  ex- 
porter of  grain  and  bulky  articles  will  prefer  to  ship  in 
full  cargo  lots,  and  he  will  not  accept  berth  space  except 
at  low  rates;  the  vessel  owners,  however,  will  prefer  to 


182     OCEAN  AND  INLAND   WATER  TRANSPORTATION 

have  the  bcrtli  ti'aflic  at  low  rates  to  sailing  without  a  full 
load,  l)eoaiise  the  additional  tonnage  Avill  add  but  little 
to  the  expense  of  the  trip,  and  will  add  appreciably  to  the 
shi])'s  gross  receipts.  Nearly  all  of  the  grain  exported 
from  New  ^'ork  city  is  handled  as  Ix'rth  cargo;  whereas 
fi-om  a  p(»i't  like  l>altinioi-e  or  Philadelphia,  where  the 
aiiioiiiil  of  exports  is  less  and  their  variety  is  limited,  and 
whcfc  there  are  fewer  vessels  seeking  cargo,  grain  and 
similai'  articles  are  usually  shi])])ed  in  full  vessel  cargoes. 

Sometimes,  as  Dr.  Smith  says,^  the  vessel  seeking 
berth  traffic  is  one  that  has  "  just  completed  a  charter 
contract,  and  is  sent  on  a  single  disconnected  and  rarely 
repeated  voyage  in  which  she  carries  freight  on  the  basis 
of  a  liner,  and  makes  the  rates  after  the  manner  of  a 
chartered  vessel.  A  vessel  is  said  to  .be  put  upon  the 
berth  when  a  steamship  agent  in  some  port  announces 
that  if  sufficient  freight  is  offered,  he  will  dispatch  a  cer- 
tain vessel  to  a  certain  port  at  about  a  certain  date.  This 
is  more  apt  to  occur  at  the  end  of  a  route,  where  more 
freight  is  received  than  dispatched.  Thus  vessels  are  put 
upon  the  berth  in  Australasia,  China,  Japan,  and  the 
Straits  Settlements,  to  load  for  the  Atlantic;  or  in  Europe, 
to  load  for  America,  and  occasionally  also,  in  the  heavy 
exporting  ports,  to  load  outward  freight.'' 

The  rates  for  l)erth  traffic  are  competitive  to  the  full- 
est extent,  and  fluctuate  through  a  much  wider  range 
than  the  rates  either  on  line  or  on  charter  traffic;  because 
the  freight  charges  for  berth  traffic  depend  not  upon  the 
general  relation  of  the  volume  of  traffic  to  the  supply  of 
shipping  facilities,  but  upon  the  urgency  of  some  par- 
ticular carrier's  need  of  securing  a  limited  tonnage  of 
commodities  within  a  short  space  of  time.  Line  and 
charter  traffic  is  moved  at  average  or  normal  rates,  berth 
traffic  at  emergency  rates. 

*  "  The  Organization  of  Ocean  Commerce,"  pp.  48,  49. 


OCEAN  FARES  AND  RATES  183 

Ocean  traffic,  in  part,  originates  at  interior  points,  and 
is  shipped  by  rail  and  water  on  through  bills  of  lading 
to  the  foreign  destination  at  some  seaport  or  inland  center 
of  consumption  or  distril)ution.  On  export  traffic  shipped 
abroad  from  inland  })oints  within  the  United  States  the 
ocean  carrier  now  usually  receives  the  through  rate,  less 
the  regular  rail  rate,  and  the  fluctuations  in  the  through 
rate  generally  aifect  only  the  ocean  rate,  and  not  the  rail 
charge.  On  traffic  imported  from  abroad  directly  to 
some  interior  city  within  the  United  States,  the  American 
rail  carrier  frequently  receives  a  percentage  of  the  through 
rate,  in  which  case  the  variations  in  the  through  charges 
aifect  the  railroad  company's  share,  as  well  as  the  portion 
received  by  the  ocean  carrier. 

Formerly,  the  competition  of  American  railways  for 
the  import  traffic  was  such  that  their  regular  practice 
was  to  take  the  traffic  at  a  small  percentage  of  the  fluctu- 
ating through  rate,  and  rail  charges  on  imported  com- 
modities were  often  only  a  fraction  of  the  charges  for 
transporting  similar  domestic  articles.  While  the  former 
practice  of  discriminating  against  the  maker  and  shipper 
of  domestic  articles,  and  in  favor  of  the  manufacturer 
and  the  shipper  of  foreign  commodities,  has  not  altogether 
ceased,  the  extent  of  the  practice  and  the  amount  of  the 
discrimination  against  the  American  shipper  have  been 
much  lessened  by  the  more  effective  regulation  of  inter- 
railway  competition  made  possible  by  the  higher  organi- 
zation of  the  railway  service,  and  by  the  cooperation  and 
consolidation  of  rival  railroads. 

Ocean-freight  rates,  like  railway  rates,  have  declined 
as  technical  improvements  have  reduced  the  costs  of 
transportation.  The  economies  resulting  from  the  use  of 
more  efficient  marine  engines  and  of  vessels  of  greater 
carrying  capacity  have  been  accompanied  by  lower  rates. 
In  this  regard  the  ocean-freight  traffic  differs  from  the 


184     OCEAN  AND  INLAND  WATER  TRANSPORTATION 

passenger  service,  in  which  the  betterments  of  service,  as 
regards  .speed,  comfort,  and  luxury,  have  required  addi- 
tional expenditures  that  have  fully  offset  the  economies 
gained  by  the  technical  improvements. 


OCEAN  RATES  OF  FREIGHT.     INWARD  AND  OUTWARD 

STATEMENT  SHOWING  THE  PERCENTAGE  FLUCTUATIONS  IN  MEAN  YEARLY 
FREIGHT  RATES  BETWEEN  THE  UNITED  KINGDOM  AND  CERTAIN  PORTS 
ABROAD  DURING  EACH  OF  THE  YEARS  1884  190.3,  AS  COMPARED  WITH 
MEAN  R.\TES  FOR  THE  YEAR  1900.  ThE  PERCEXTACiE  FLUCTUATIONS 
IN  WHOLESALE  PRICES  OF  COMMODITIES  ARE  ADDED  FOR  CO.MPARI- 
SON.    (1900  FIGURE  EQUALS   100   PER   CENT.) 


OCEAN    FREIGHT 

RATES. 

Mean  of 

preceding 

columns. 

Index  Number 
of  Wholesale 

Year. 

Inwaxd. 

Outward. 

Prices  of 
Commodities.' 

1884 

121.7 

106.9 

98.0 

94.6 

107.3 

125.4 

102.8 

104.4 

84.3 

84.8 

81.2 

74.8 

82.8 

81.8 

96.5 

83.7 

100.0 

69.1 

65.2 

66.6 

110.7 

101.0 

105.0 

105.6 

114.0 

119.2 

110.5 

95.5 

89.3 

82.3 

78.3 

75.7 

76.0 

84.0 

88.9 

91.7 

100.0 

80.8 

76.1 

78.9 

116.2 

104.0 

101.5 

100.1 

110.7 

122.3 

106.7 

100.0 

86.8 

83.6 

79.8 

75.3 

79.4 

82.9 

92.7 

87.7 

100.0 

75.0 

70.7 

72.8 

106.1 

1885 

99.8 

1886 

94.4 

1887 

92.2 

1888 

95.3 

1889 

97.1 

1890 

99.5 

1891 

101.1 

1892 

96.3 

1893 

94.6 

1894 

90.3 

1895 

86.8 

1896 

83.9 

1897 

85.7 

1898 

88.5 

1899 

89.5 

1900 

100.0 

1901 

95.2 

1902 

94.7 

1903 

94.4 

'  See  "  Report  on  Wholesale  and  Retail  Prices  "  (House  of  Commons  Paper.  No. 
321.  of  1903),  p.  34.  The  figures  have  been  converted  to  the  basis  of  1£00  as  the 
standard  year. 

The  actual  fluctuations  in  ocean-freight  rates,  and  the 
decline  in  charges,  are  not  easily  shown  by  tables  and 
charts  of  rates,  because  of  the  great  variety  of  articles 


OCEAN  FARES  AND  RATES 


185 


comprised  in  ocean  traffic,  and  because  of  the  large  num- 
ber of  ocean  routes.  The  British  Board  of  Trade  in  1904 
collected  data  regarding  ocean-freight  rates  for  numerous 
articles  imported  into  Great  Britain  from  North  America, 
South  Europe,  the  Indian  Ocean,  and  Australasia,  and 
for  commodities  exported  from  Great  Britain  to  Canada 
and  the  United  States,  the  North  Sea  and  Baltic  coun- 
tries. South  Europe,  South  America,  and  Australasia. 
From  these  detailed  rates  there  was  calculated  the  mean 
annual  freight  rate  on  ocean  traffic  for  each  of  the  twenty 
years  from  1884  to  1903  inclusive.  By  taking  the  av- 
erage or  mean  rate  for  1900  as  the  basis  of  comparison, 
and  calling  that  rate  100  per  cent,  and  by  expressing  the 
average  rates  for  the  other  years  in  percentages  of  the 
rate  for  1900,  the  fluctuations  in  rates  for  the  twenty 
years  were  shown  by  the  Board  of  Trade  in  tabular  form 

1888   1890   1892   1894   1896    1898   1900   1902  19Q3 


— I — 

— 1 — 

— 1 — 

— ; — 

1 — 

'  1  ■■ 

— 1 — 

■  1 

1 

\ 

/ 
/ 

A 

\    \ 
^  \ 

"  / 

'  ^ 

\ 
\  \ 

V 

\  \ 
\  \ 
\  \ 

/ 

v/ 

V 

\ 
\ 

V 

V      / 

'V 

I  \ 

\  \ 

'\ 

V 

/ 

\  \ 

\ 

^ 

Fluctuations  in  Ocean  Freights,  1884-1903. 

Chart  Showing  the  Percentage;  Fluctuations  in  Mean  Yearly  Freight 
Rates  in  Certain  Trades  and  Voyages.     (1900  figure  equals  100  per  cent.) 


Inward  Freight  Rates 


Outward  Freight  Rates. 


18G      OCEAN  AND   INLAND  WATER  TRANSPORTATION 

as  on  page  184.  The  fluctuations  in  wholesale  prices  are 
also  shown  in  the  table,  and  it  will  be  seen  that  ocean 
rates  have  varied  through  a  wider  range  than  general 
wholesale  ])riccs  have. 

The  facts  contained  in  the  table  on  page  184  are 
charted  in  the  report  of  the  Board  of  Trade  on  page  185. 

In  discussing  the  data  presented  in  the  table  and 
chart,  the  report  of  the  Board  of  Trade  states,  "  that 
subject  to  minor  fluctuations,  due  doubtless  to  the  special 
conditions  prevailing  in  ])ai'ticu]ar  trades  from  time  to 
time,  the  trend  of  inward  and  outward  freight  rates  as  a 
wliolo  has  been  generally  similar.  In  l)oth  cases  the  max- 
imum year  of  the  period  was  1889,  a  time  of  great  com- 
mercial activity  throughout  the  world.  Thence  freight 
rates  declined  imtil  the  year  1895  or  1896,  after  which 
they  recovered  until  a  second  maximum  point  was  reached 
in  1900,  a  year  when  trade  was  very  good,  and  when  the 
South  African  War  made  great  demands  on  shipping  for 
transport  purposes.  It  will  be  seen  that  inward  freight 
rates  show  an  intermediate  maximum  point  in  1898,  the 
year  of  the  Spanish-American  War.  After  1900  there 
was  a  collapse  of  freight  rates,  the  figures  for  1902  both 
for  inward  and  outward  freights  being  lower  than  in  any 
other  year  of  the  series.  The  rates  in  1903  were  slightly 
hiiiher  than  in  1902." 


1831  ^SS•^   ISiJe  1887  18381889  18901891  1892  1893  1894  1895  1396  1897  1898  18991900  1901190:;  1903 


8  - 
7  5 
6  - 

5  - 
4  - 
3- 
2  - 


OCEAN  FARES  AND  RATES 


187 


The  mean  annual  ocean  rates  per  bnsliel  bv  steamship 
on  grain  (wheat)  from  Xew  York  to  Liverpool  for  the 
twenty  years  ending  with  1903  may  be  charted  as  on  the 
foregoing  page.  The  mean  annual  steamship  rates  from 
Xew  York  to  Liverpool  on  grain,  flour,  beef,  and  pork, 
from  1884  to  1903  inclusive,  were  as  follows: 


CLASS   OF   OOODS. 

Year. 

Grain. 

Flour,     j      Beef. 

Pork. 

SCALE. 

Per  bus.i 

cts. 
7.02 
6.40 
6.62 
5.04 
5.28 
7.88 
4.94 
6.28 
5.22 
4.70 
3.82 
4.32 
5.88 
6.18 
6.92 
4.84 
6.80 
2.48 
2.92 
2.92 

Per  ton.i 

Per  tierce. 

Perbbli 

1884 

$3.05 
2.76 
2.82 
2.22 
2.32 
3.33 
2.44 
2.73 
2.48 
2.26 
1.89 
1.88 
2.61 
2.74 
3.34 
2.55 
3.07 
1.44 
1.80 
1.82 

cts. 
89.9 
77.4 
77.9 
63.6 
71.1 
105.2 
81.4 
95.4 
69.6 
69.6 
58.6 
53.6 
72.1 
68.1 
86.4 
66.8 
87.9 
36.3 
47.3 
50.6 

ct.s. 
75.4 

1885        .    . 

59   1 

1886 

63.1 

1887 

51.6 

1888 

52.1 

1889 

76.4 

1890 

61.1 

1891 

63.1 

1892 

45.8 

1893 

49.1 

1894 

42.3 

1895 

35.3 

'1896 

50.1 

1897 

48.6 

1898 

64.1 

1899 

49.1 

1900 

65.6 

1901 

28.3 

1902 

35.8 

1903 

46.8 

1  Rates  compiled  from  the  yearbooks  of  the  New  York  Produce  Exchange. 


The  ocean-freight  service  to-day  is  far  superior  to 
the  service  of  fifty  or  twenty-five  years  ago.  Traflic  is 
carried  at  greater  speed  and  with  less  risk.  Refrigeration 
lias  included  perisliable  articles  in  the  list  of  the  commod- 
ities exchanged  in  iutcrnatioual  conuuerce.  Sjiecial  types 
of  vessels  have  been  iiil  i'ikUummI  to  handle  f>il,  ore,  fruit, 
and  other  commodities  whose  transportation  can  be  facil- 
14 


188     OCEAN  AND   INLAND   WATER   TRANSPORTATION 

itated  hy  iisiiii;'  sliips  a<l;i|)t(M|  to  tlic  pccnliai'  iicfMls  of 
])iirti('iil;n'  kinds  of  traffic.  Some  iiiii)i'oveiiients  in  the 
occan-frcio'lit  service  have  made  the  service  more  expen- 
sive; l)iit  liic  iiiipi'oveinciits  that  have  rerhiced  expenses 
have  been  of  greater  effect,  and  the  present  excellent 
service  of  ocean-freight  transportation  is  performed  at 
l(j\ver  average  rates  than  formerly  prevailed. 

REFERENCES     FOR    FURTHER    READING 

Smith,  J.  R.  "  The  Organization  of  Ocean  Commerce,"  Chapter  IV. 
"British  and  Foreign  Trade  and  Industry."  (2d  Series.) 
Second  Series  of  Memoranda,  Statistical  Tables  and  Charts, 
prepared  in  the  Board  of  Trade  with  reference  to  various 
matters  bearing  on  British  and  foreign  trade  and  industrial 
conditions.  (One  section  of  this  Blue  Book  is  devoted  to  the 
"Course  of  Ocean  Freights  during  the  past  twenty  years." 
The  charts  and  tables  there  presented  contain  a  large  amount 
of  information.) 


CIIAPTEU    XIV 


MAEIXE    INSUKvVXCE 


Ocean  transportation  and  the  business  of  international 
commerce  could  not  have  reached  their  present  high  state 
of  development  without  the  aid  of  marine  insurance, 
whereby  the  risks  of  losses  at  sea  are  taken  from  the  indi- 
vidual owner  of  property  afloat  and  distributed  among 
numerous  individuals  or  corporations.  Unless  men  were 
able  to  minimize  the  risks  of  losing  their  property,  they 
would  hesitate  to  invest  capital  in  ships;  unless  the  mer- 
chant were  able  to  insure  his  cargoes,  he  would  not  be 
able  to  engage  extensively  in  international  trade.  "With- 
out marine  insurance  to  relieve  the  merchant  of  risks, 
he  would  be  obliged  to  limit  trade  to  commodities  upon 
which  he  could  make  large  profits;  but  with  the  protection 
afforded  by  insurance,  he  can  do  l)usiness  upon  a  narrow 
margin,  can  handle  the  great  staples  of  present  commerce 
as  well  as  the  luxuries  which  formerly  characterized  in- 
ternational exchanges.  Insurance  has  enabled  goods  to 
be  sold  at  lower  prices  than  they  -could  otherwise  have 
been  sold,  and  has  thus  hel])('(l  to  make  possible  the  great 
development  that  has  taken  place  in  the  world's  maritime 
commerce. 

The  world's  commerce  is  organized  on  the  basis  of 
an  extensive  system  of  international  credits.  Unless 
the  elements  of  risk  had  been  eliminated  from  the  busi- 
ness of  international  trade  the  ])resent  extensive  use  of 
credit  would  be  impossible.     The  marine  insurance  policy 

189 


190     ()CI;AN    and    inland    VVATEK   T1{ANSI'()I{TATI0N 

always  accompanies  tlic  Mil  of  ladini!^,  and  is  as  essential 
a  factor  of  commercial  ci-cdit  as  is  the  hill  of  lading. 

Marine  insurance  might  logically  have  been  considered 
in  Part  11  of  this  volume  in  connection  with  the  discus- 
sion of  the  ocean  trans^jortation  service;  however,  insur- 
ance may  also  jn-operly  he  dealt  with  in  this  ])art  of  tlie 
book  where  the  N'arious  relations  of  the  earriers  to  the 
])uhli(*  are  studied.  Insurance  constitutes  one  of  the  car- 
rier's costs  of  performing  the  service  of  ocean  transporta- 
tion, and  is  consequently  one  of  the  necessary  expenses 
of  international  commerce.  Marine  insurance  is  an  es- 
sential feature  both  of  the  ocean  transportation  service 
and  of  the  business  of  international  trade. 

Marine  insurance  covers  the  risks  of  loss  of  ship,  cargo* 
and  freight  charges.  The  business,  as  conducted  to-day, 
originated  about  1200  a.d.,  among  the  Lombard  merchants 
of  Northern  Italy.  Previous  to  that  time  persons  having 
money  to  invest  made  loans  to  the  owners  of  a  vessel  and 
its  cargo  upon  the  condition  that  the  money,  together 
with  liberal  interest,  should  be  returned  at  the  end  of 
the  ship's  voyage.  If  the  vessel  and  cargo  were  lost,  the 
loan  was  not  repaid.  These  transactions  were  called  loans 
on  bottomry,  and  differed  radically  from  marine  insur- 
ance, which  consists  of  the  payment  in  advance  of  a  pre- 
mium by  the  owners  of  ship  or  cargo  in  return  for  a 
guarantee  on  the  part  of  the  insurance  company  of  the 
payment  of  all  or  a  portion  of  the  stipulated  sum  of 
money  in  case  of  the  total  or  partial  loss  of  the  property 
invested  in  the  ship  or  cargo. 

Although  marine  insurance  was  generally  practiced 
both  in  England  and  on  the  Continent  long  before 
Lloyd's  Association  of  London  originated,  that  associa- 
tion has  had  such  an  influence  upon  the  development  of 
marine  insurance  as  to  cause  the  name  of  Lloyd  to  be 
most  closely  identified  with  that  form  of  insurance.     A 


MARINE   INSURANCE  191 

l)rief  account  of  Lloyd's  will  illustrate  one  of  the  two 
leading  plans  of  marine  insurance  now  followed  by  under- 
writers. 

In  the  middle  of  the  seventeenth  century  a  London 
coffee  house  conducted  by  Edward  Lloyd  came  to  be  a 
meeting  place  for  merchants  and  seamen.  Lloyd  de- 
veloped an  extensive  system  of  home  and  foreign  cor- 
respondence, by  which  he  was  kept  informed  concerning 
the  movements  and  condition  of  vessels  engaged  in  ocean 
commerce  in  various  parts  of  the  world.  He  secured  this 
information  for  his  patrons,  and,  in  consequence,  his  cof- 
fee house  became  the  meeting  place  for  underwriters  who 
assembled  there  to  carry  on  their  business  of  marine  in- 
surance. Until  1692  Lloyd's  Association  was  located  in 
Tower  Street,  London;  then  it  was  removed  to  Lombard 
Street,  and  finally,  in  1774,  it  occupied  the  Royal  Ex- 
change, which  has  since  been  the  chief  center  of  the  busi- 
ness of  marine  insurance  throughout  the  world. 

Lloyd's  Association,  as  its  name  implies,  is  composed 
of  a  group  of  men  each  carrying  on  marine  insurance  in 
an  independent  capacity.  Each  member  of  the  associa- 
tion has  a  desk  allotted  to  him,  there  being  between  350 
and  400  desks  in  the  Royal  Exchange,  London.  An  in- 
surance policy  covering  the  vessel  and  its  cargo  is  not 
underwritten  by  one  person  or  firm,  but  by  several ;  some- 
times there  are  from  50  to  100  underwriters,  who,  how- 
ever, are  not  bound  together,  but  act  independently,  each 
person  accepting  for  himself  only  as  much  of  the  risk  as 
he  may  desire  to  assume.  The  method  of  doing  business 
at  the  Royal  Exchange  in  London  is  described  as  follows 
by  Mr.  Samuel  Plimsoll :  ^ 

"  The  proposals  of  insurance  are  handed  around  by 
the  insurance  brokers'  clerks  all  day  long;  these  pro- 
posals, called  slips,  give  the  name  of  the  ship,  amount  to 

'  The  Nineteenth  Century,  vol.  xxv,  p.  329. 


192     OCEAN    AM)    I.M.AM)    W  ATEll   TRANSPORTATION 

l)c  iiisni'c(l,  jiiid  rate  jxt  cent  offered.  Perhaps  sixty  or 
seventy  of  these  slips,  or  even  more,  are  laid  before  each 
underwriter  daily.  After  reference  to  LloycVs  LiM  of 
^'^lii/)s,  he  either  passes  it  on,  or,  if  he  decides  to  '  take  a 
line  '  n])on  it,  he  subscribes  or  '  underwrites  '  his  name, 
toij,('ther  with  the  amount  he  is  willing  to  guarantee  for 
at  the  rate  specified;  this  varies  much,  and  generally  goes 
as  low  as  £200  or  £100,  frequently  £50,  and  sometimes 
even  less  than  that — never  an  amount  large  enough  to 
warrant  his  disi)uting  his  liability  in  case  of  loss." 

The  members  of  Lloyd's  Association  are  kept  in- 
formed regarding  vessels  to  be  insured  by  an  intelligence 
(h'partment  of  the  association,  which  has  agents  located 
in  every  part  (»f  the  wni-ld  for  tlie  ])Ui"|)Ose  of  forward- 
ing inf(n-mation  to  London  regarding  the  arrival  and  de- 
parture of  vessels,  wrecks,  accidents,  and  all  other  facts 
aifecting  shipping.  The  information  obtained  from  agents 
and  shipmasters  enables  the  association  to  issue  five  dif- 
ferent publications : 

1.  Lloyd's  List,  which  is  the  official  daily  publication 
of  the  association,  and  contains  the  shi]')]iing  news  as  it  is 
currently  received. 

2.  The  Index.  A  weekly  paper  containing  a  list  of 
the  vessels  of  the  world,  and  the  condition  and  location 
of  each  vessel  according  to  the  latest  reports. 

o.  LJoi/d\s  Th'ijislc)-  of  Brilisli  (Old  Foreifpi  Shipping. 
This  is  a  hirge  annual  volume,  which  has  been  regularly 
])ublish(Hl  since  1S;^,4.  This  ])ublication  gives  a  descrip- 
lioii  and  rating  of  every  vessel  of  ini])ortance  employed 
in  the  world's  commerce. 

4.  .1  Jt'cf/islcr  of  Cn plains,  which  is  a  biograjthical 
dictionary  giving  an  account  of  the  record  of  service 
and  qualifications  of  the  certified  masters  of  British 
ships.  The  volume  contains  the  record  of  about  25,000 
men. 


MARINE  INSURANCE  193 

5.  A  Record  of  Losses.  A  volume  that  is  often  spoken 
of  as  the  Black  Book*. 

Althongh  Lloyd's  Association  is  more  iiiBiiential  than 
anv  of  its  competitors,  there  are  many  rival  iusiiraiiee 
corporations  in  (Jreat  Britain;  and  the  competition  <d" 
these  rival  companies  is  .cradually  deprivinu'  Lloyd's  As- 
sociation of  its  nndispnted  h^adershij)  in  niai'ine  insni-ance. 
It  will,  however,  be  some  time  before  any  I'ival  company 
or  association  can  hope  to  be  as  influential  as  Lloyd's 
now  is. 

The  various  underwriters  in  Great  Britain  now  con- 
trol three  fourths  of  the  marine  insurance  written  in  the 
entire  world,  (ireat  I^ritain's  control  of  marine  insur- 
ance is  even  more  overwhelming  than  is  her  position  in 
the  carrying  trade  of  the  world;  nevertheless,  other  cen- 
ters of  marine  insurance  are  developing,  the  most  rapid 
growth  in  the  business  outside  of  England  being  enjoyed 
by  Hamburg,  Germany. 

Li  the  L^nited  States  marine  underwriting  was  for- 
nierely  a  very  prosperous  business,  but  with  the  decline 
of  our  tonnage  the  amount  of  marine  insurance  written 
in  this  coimtry  has  fallen  oft".  .Vmerican  marine  insur- 
ance methods  lun'e  dift'ered  slightly  from  those  followed 
by  the  underwriters  connected  with  Lloyd's  Association, 
the  business  in  this  country  being  conducted  mainly  by 
corporations.  The  Lloyd  system,  although  tried  in  the 
United  States,  has  never  flourished  in  this  country. 

The  history  of  marine  insurance  in  the  United  States 
shows  how  closely  its  success  or  decline  is  bound  up  with 
the  prosperity  and  vicissitudes  of  our  ovei--sea  merchant 
marine.  Three  distinct  periods  in  the  history  of  marine 
insurance  in  the  United  States  are  distinguishable: 

1.  Until  1794,  such  marine  insurance  as  was  written 
in  America  was  carried  by  individuals  or  partnerships, 
and    not    by    corporations.     The    first    insurance    ofiice 


194     OCEAN    AND   INLAND    WATER  TRANSPORTATION 

(i|)ciic(l  hy  iiiiy  individual  in  (lie  A  incriciiu  colonies  sooiii.s 
to  have  been  slai'tecl  in  Pliihi<I(l|iliia"  in  ITJl.  The  first 
office  in  New  ^'(•l•k  was  ()|)(nc(|  in  I7.M».  '{"he  business 
done  in  Philadelphia,  New  York,  and  Boston,  however, 
but  partly  supplied  the  deniajid  for  marine  insurance  in 
America.  Most  persons  desiring  to  secure  insurance 
were  obliged  to  apply  to  tlic  London  undcrwi-iters. 

2.  The  second  period  in  tlie  history  of  marine  insur- 
ance in  the  United  States  began  in  171)4,  at  which  time 
the  General  Assembly  of  Pennsylvania  gave  a  charter 
to  the  Insurance  Company  of  North  America,  a  com[)any 
that  had  been  carrying  on  business  without  incorporation 
for  two  years.  The  example  set  by  Pennsylvania  in 
chartering  this  company  led  to  the  incorporation  of  nu- 
merous companies  in  Pennsylvania  and  other  States.  I'he 
fifteen  years  from  1790  to  1805  were  years  of  prosperity 
for  the  American  merchant  marine  and  its  development 
was  accompanied  by  a  rapid  increase  in  the  number  of 
insurance  companies.  Thirty-two  such  companies  were 
incorporated  prior  to  1800.  These  early  years  of  pros- 
perity were  unfortunately  followed  by  several  years  of 
heavy  losses  resulting  from  the  destruction  of  American 
vessels  during  the  years  from  1807  to  1815,  when  the 
Napoleonic  wars  in  Europe  and  our  War  of  1812-15  al- 
most paralyzed  the  international  carrying  trade  of  Amer- 
ican vessels. 

AVith  the  restoration  of  peace  in  1815,  the  American 
marine  revived,  but  the  insurance  business  was  not  im- 
mediately restored  to  prosperity,  because  of  the  unre- 
strained rivalry  of  the  numerous  companies  engaged  in 
underwriting.  There  was  not  enough  business  to  enable 
the  many  insurance  companies  to  prosper;  indeed,  it  was 
not  until  1840  that  marine  insurance  business  in  the 
United  States  again  began  to  flourish.  Then  followed 
twenty  years  of  such  rapid  increase  in  marine  underwrit- 


MARINE  INSURANCE  195 

iiig  that  the  two  decades  preecdiiif!;  tlic  great  Civil  War 
constitute  tlie  golden  age  of  marine  insurance  in  the 
United  States. 

.').  With  the  Civil  War  began  the  third  j)eriod  in  the 
historv  of  marine  insurance  in  the  United  States — a 
period  of  steady  and  disheartening  decline.  The  four 
years  of  the  Civil  War  were  a  heavier  strain  than  most 
insurance  companies  could  bear;  only  the  strong  ones 
were  al)le  to  survive  the  period  of  that  conflict.  Had  the 
merchant  marine  engaged  under  the  American  flag  in 
our  foreign  commerce  been  prosperous  during  the  past 
forty  years,  marine  insurance  business  would  probably 
have  flourished  in  the  United  States;  but  tlie  tonnage  of 
our  over-sea  shij)ping  has  dwindled  to  small  prop(trtions, 
and  with  its  decline  the  business  of  marine  underwriting 
in  the  United  States  has  fallen  off. 

In  addition  to  the  causes  just  mentioned  for  the  de- 
cline of  nuirine  insurance  in  the  Unit(!d  States,  there  are 
two  othei's  that  should  be  noted.  (1)  After  the  introduc- 
tion of  iron  vessels  on  an  extensive  scale  about  the  middle 
of  the  nineteenth  century,  liloyd's  Association  gave  iron 
vessels  a  higher  rating  than  wooden  ones.  The  effect  of 
this  was  a  discrimination  in  favor  of  British  shipping, 
because  of  the  fact  that  most  of  the  iron  vessels  of  the 
world  were  under  the  JJritish  flag.  American  shipping, 
until  very  recently,  has  consisted  nuiinly  of  wooden  ves- 
sels. Lloyd's  higher  rating  for  iron  vessels  may  have 
been  justified,  but  it  lias  had  an  adverse  elVect  upon  the 
growth  of  marine  underwriting  in  the  United  States,  and 
u])on  the  developnu'ut  of  .Vmerican  shijiping.  (2)  For- 
eign miderwriters,  j)rosperous  at  home,  have  competed 
against  American  underwriters  with  success  for  the  busi- 
ness of  insuring  American  shi])ping  and  commerce.  In 
1871  there  was  only  one  foreign  company  doing  marine 
under\vriting  in  New   York  city;    three   years   later  the 


|<)(;     OCKAX    AM)    IM>A.\I)    \VATi:i;    TRANSPORTATION 

iiiiiiihcr  of  foreiiiii  coinpaiiics  liad  increased  to  seven;  to- 
day there  are  nnlv  tlii'cc  Aincrican  conipanies  and  fifteen 
forciiiii  eoni])aiiics  doin^  niai-iiic  nndcrwi'itinir  in  ^sew 
Ynvk.  A  few  liiiin'cs  ill  rciiard  \>>  the  aiiKMiiit  of  niai'iiK' 
.iiisni-ancc  l)usiii('ss  done  in  ilic  I'liiicd  States  will  indicate 
the  ivlativc  strenj;t]i  of  the  fnrcii;ii  and  duuicstic  coni- 
jianics. 

During  the  year  f '.)<»;;  the  total  net  marine  risks 
assumed  bv  all  the  foreign  and  domestic  companies  opera- 
ting in  the  I'nited  States  aggregated  ai)pro.\iniately 
$(),S77,(H)(i,i>LM  ;  the  net  premiinns  received,  nearly  $18,- 
000,000;  and  the  admitted  assets  $112,!»1-J,000.  Accord- 
ing to  Dr.  Huebner  more  than  one  half  of  the  total  marine 
risks  assumed  by  msurance  companies  in  the  Tnited  States 
during  11)03  were  underwritten  by  twenty  leading  for- 
eign companies  operating  in  the  United  States.  The  op- 
erations of  the  foreign  companies  are  not  confined  to  the 
Eastern  States,  nor  to  American  ships  engaged  in  the 
foreign  trade,  as  is  shown  by  the  fact  that  foreign  com- 
panies wrote  61.5  per  cent  of  the  insurance  placed  upon 
the  vessels  operating  upon  our  Great  Lakes  in  1903. 
Our  coastwise  and  foreign  shipping  operated  from  the 
Gulf  ports  of  the  United  States  secnred  75  per  cent  of  its 
insurance  from  British  and  German  firms,  and  the  situa- 
tion on  the  Pacific  coast  was  practically  the  same. 

The  American  company  doing  the  largest  marine  in- 
surance business  at  the  present  time  is  the  Atlantic  Mu- 
tual, of  New  York  city.  This  company  was  organized 
in  1842,  and  has  devoted  itself  exclusively  to  the  business 
of  marine  insurance.  Most  other  American  companies 
engaged  in  marine  underwriting  are  also  fire  insurance 
companies;  among  the  important  marine  and  fire  insur- 
ance companies  being  the  jiarent  of  all  insurance  com- 
panies in  America,  the  Insurance  Company  of  Xorth 
America,  organized  in   Philadelphia  in  1701 ;   the  Provi- 


MARINE   INSURANCE  197 

dence-Washington  Compaiij,  organized  in  Providence, 
1799;  the  St.  Panl  Pire  and  Marine  Company,  1865;  the 
Boston  Insurance  Company,  1873;  and  the  Federal  Insur- 
ance Company  of  Jerse}'  City,  1901.  There  are  twenty- 
six  American  fire-marine  insurance  companies,  but  only 
two  of  them  do  a  hirger  marine  tlian  fire  business.  The 
iignres  for  the  entire  business  done  by  the  companies  en- 
gaged in  marine  insurance,  or  in  both  mai'inc  and  fire 
insurance*,  show  that  tliose  companies  carry  lire  risks 
thi'cc  times  as  great  as  their  marine  risks.  The  premiums 
they  receive  from  their  fire  insurance  are  four  times  the 
pi'ciiiiums  obtained  from  their  mnriiic  l)usin('ss. 

'Ilie  facts  just  citecl  show  tliat  tlic  business  of  marine 
uudcrwi'iting  in  the  Tnited  States  has  ceased  to  be  ])ros- 
])erous,  antl  that  most  American  companies  are  abh^  to 
engage  extensively  in  marine  underwriting  only  by  com- 
hiuing  that  business  with  fire-insurance  risks.  Although 
the  tonnage  of  American  shipping  engaged  in  the  coast- 
wise trade  of  the  United  States  has  steadily  increased 
with  the  growth  of  our  commerce,  American  marine 
underwriters  have  not  been  able  to  hold  their  own  in 
competition  with  the  British  and  German  companies, 
wliose  l)usiness  rests  upon  the  safe  foundation  of  a  rap- 
idly increasing  national  marine  engaged  in  the  foreign 
trade. 

In  connection  with  the  progress  of  consolidation  in 
the  service  of  ocean  transportation,  there  has  arisen  a 
tendency  for  the  largest  steamshii)  companies  to  jji'ovidc 
a  system  of  self-insui'ance.  The  llandiurg-Anici'ican 
( *onipany,  the  North  (iei-man  Lloyd,  the  i*eninsnhii'  ami 
Oriental  Steamship  (^)nlpany,  ami  the  international  Mer- 
cantile Marine  (N)nij)any,  ui'c  conspienous  instances  of 
large  companies  that  insure  the  greater  part  of  their  own 
shipping.  Each  of  these  companies  establishes  an  insur- 
ance fund   into  which  it  pays  annually  the  jiremiums  it 


198     OCEAN  AND  INLAND   WATER  TRANSPORTATION 

\v(»iil<l  {niy  to  insurance  companies,  'I'lic  Jntcrnational 
Mercantile  Marine  Company,  for  instance,  during  the  year 
1903,  paid  into  its  insurance  fund  the  sum  of  $2,100,523. 
In  the  case  of  some  companies  it  is  the  custom  to 
insure  the  cargo  as  well  as  the  ships.  AVhcn  this  is  done, 
the  steamship  company  usually  distrihutes  the  risks  it  car- 
ries on  cargo  among  regular  insurance  comj)anies.  The 
tendency,  however,  is  for  the  steamship  companies  to 
refrain  from  insuring  cargoes,  and  to  limit  tlieir  insur- 
ance to  the  plan  of  self-insurance,  covering  only  the  ves- 
sels they  own. 

The  marine  insurance  policy  is  defined  by  Mr.  John 
Duer,  in  his  work  on  the  "  Law  and  Practice  of  Marine 
Insurance,"  as  a  "  contract  of  indemnity,  in  which  the 
insurer,  in  consideration  of  the  payment  of  a  certain  pre- 
mium, agrees  to  make  good  to  the  assured  all  losses,  not 
exceeding  a  certain  amount,  that  may  happen  to  the  sub- 
ject insured  from  the  risks  enumerated  <>r  imi)lied  in  the 
policy,  during  a  certain  voyage  or  period  of  time."  The 
contract,  in  order  to  be  valid,  nmst  be  undertaken  in  good 
faith  by  both  parties,  and  all  nuiterial  facts  affet^ting  the 
obligations  covered  1)v  the  contract  must  be  accurately 
stated  by  the  purchaser  of  insurance,  who  must  ordinarily 
possess  an  insurable  interest  in  the  subjects  covered  by 
the  policy.  This  insurable  interest  usually,  but  not  nec- 
ccssarily,  implies  ownership  of  the  property  insured;  how- 
ever, ownership  is  not  absolutely  essential,  the  courts  hav- 
ing held  that  a  ])ers()n  possesses  an  insurable  interest  if 
he  can  show  that  the  destruction  of  the  projierty  insured 
would  indirectly  inflict  a  damage  upon  him  or  his  prop- 
erty. Some  comj)anies  write  what  are  ]io]>uhirly  called 
wager  policies,  which,  as  their  name  suggests,  involve  no 
insurable  interest  on  the  part  of  the  insured.  The  wager 
policy  usually  contains  such  a  clause  as  ""  interest  or  no 


MARINE  INSURANCE  199 

interest,"  or  "  policy  proof  of  interest,"  modifying  the 
terms  of  the  ordinary  insurance  contract. 

In  his  work  on  ''  Marine  Insurance  "  Mr.  William 
Gow  siiinniarizes  the  essential  features  of  a  marine  in- 
surance jxdicy,  by  stating  that  the  policy  must  (1)  contain 
a  contract  of  indenmity;  (2)  be  made  in  good  faith;  (.'>) 
refer  to  a  stipulated  proportion  of  the  property  affected 
by  the  insurance;  (4)  must  iudicate  that  the  insured  luis 
a  genuine  interest  in  the  property  covered  by  the  con- 
tract; (5)  that  the  insurance  is  against  contingencies,  def- 
initely stated  in  the  contract,  to  which  the  pr()2)erty  in- 
sured is  exposed;  and  ((3)  that  the  insurance  is  afforded 
in  return  for  a  definite  payment  on  the  part  of  the  in- 
sured. 

The  kinds  of  proj)erty  covered  by  marine  insurance 
policies  are  very  numerous;  consequently  there  are  many 
types  of  policies,  among  which  may  be  mentioned  "  vessel 
policies,"  "  vessel  and  freight  policies,"  "  cargo  policies," 
"  steamboat  policies  only,"  "  tug  policies,"  "  stranding  or 
collision  policies  only,"  "  lighterage  policies,"  "  yacht 
23olicies,"  "  whaling  and  fishing  policies,"  "  canal  hull  pol- 
cies,"  "  river  cargo  policies,"  "  lake  cargo  and  vessel 
policies,"  ''  cotton  policies,"  ''  builders'  policies,"  etc. 

The  marine  insurance  policies  written  to  cover  the 
above  and  other  kinds  of  property  vary  in  accordance 
with  the  nature  of  the  risk  assumed  by  insurance  com- 
2)anies,  and  may  accordingly  be  grouped  into  four  classes: 

The  first  class  of  policies  includes  those  in  which  the 
value  of  the  property  insured  is  stated  in  the  policy. 
Such  a  policy  may  be  eitlier  "  valued  "  or  '*  open,"  a 
valued  policy,  as  defined  by  Dr.  Iluebner,  "  being  one 
which  stipulates  some  agreed  value  (not  necessarily  the 
real  value),  such  as  $1,000  worth  of  goods  or  a  ship 
worth  $50,000;  an  open  policy,  on  the  contrary,  being 
one  which  omits  to  specify  the  value  of  the  subject  in- 


200      OCEAN   AND   INLAND   WATEIi  TRANSPORTATION 

sui'cd,  l)ut  l('a\('s  tills  to  l»c  ascertained  when  a  loss  oc- 
curs. The  only  real  difference  l)etween  tlie  two  is,  that 
in  case  of  total  loss,  in  the  absence  of  fraud,  the  valued 
policy  entitles  the  insured  to  receive  the  value  specified 
in  the  ])olicy  without  proving  the  loss,  while  the  open 
])(tlicy  makes  necessary  an  adjustment  as  proof  of  the 
loss  incurred.  In  case  of  i)artial  loss,  however,  this  dif- 
ference does  not  exist,  since  the  same  adjustment  must 
be  made,  irrespective  of  whether  the  policy  is  open  or 
valued." 

The  second  class  of  policies  covers  only  vessels,  and 
is  characterized  by  the  presence  or  absence  in  the  policy 
of  the  name  of  the  vessel  covered  by  the  insurance.  Pol- 
icies of  this  class  may  be  either  "  floating  "  or  "  named." 
The  significance  of  these  terms  is  described  as  follows  by 
Dr.  Huebner:  '*  By  a  floating  policy  is  meant  one  which 
describes  the  limits  of  the  voyage,  the  value  of  the  prop- 
erty insured,  and  the  type  or  class  of  vessel  to  be  em- 
ployed, but  does  not  specify  any  particular  vessel.  The 
policy,  in  other  words,  is  stated  to  apply  to  any  '  ship  or 
ships.'  The  wording  is  thus  made  sufficiently  broad  to 
enable  a  merchant  to  insure  his  goods  before  he  is  able 
to  ascertain  the  name  of  the  vessel  on  which  they  will 
be  shipped,  or  to  give  him  protection  in  case  of  loss  be- 
fore he  is  able  to  make  a  specific  insurance.  As  soon, 
however,  as  the  name  of  the  vessel  employed  on  the  voy- 
age becomes  known  to  the  insured,  this  information,  to- 
gether with  any  important  attending  facts,  is  '  declared ' 
to  the  underwriter  and  '  indorsed '  on  the  policy,  thus 
making  his  a  '  named  '  policy  instead  of  a  '  floating  '  one." 

The  third  c-lass  of  policies  comprises  those  insuring 
against  loss  within  a  stipulated  period  of  time.  Such  pol- 
icies may  be  either  '*  voyage  "  or  "  time,"  which  terms 
suflSciently  explain  themselves. 

The  fourth  class  of  policies  is  the  "  interest  policy," 


MARINE  INSURANCE  201 

or  "  one  clearly  indicating  that  the  insured  ix)ssesses  a 
true  and  substantial  interest  in  the  subject-matter  of  the 
insurance."  In  contrast  with  the  interest  policy  is  the 
wager  policy  already  described.  Such  a  contract  as  is 
made  in  the  wager  policy  is  not  valid,  and  would  not  be 
upheld  by  courts  in  the  United  States.  Such  policies 
have  been  declared  void  by  statute  in  England,  but  they 
continue  to  be  written  to  a  limited  extent. 

The  losses  covered  by  these  dift'erent  classes  of  policies 
are  of  three  general  kinds:  (1)  Losses  occasioned  by  fire 
on  shijiboard  or  caused  by  the  "  perils  of  the  sea,"  in- 
cluding all  unavoidable  damage  to  property  caused  by 
the  elements  or  resulting  from  inevitable  accidents;  (2) 
jettison,  or  the  throwing  overboard  of  a  part  of  the  cargo 
or  easting  away  of  masts,  spars,  rigging,  or  fittings  of 
the  ship  for  the  purpose  of  lightening  or  relieving  the 
ship  in  case  of  storm  or  accident,  and  barratry  or  knavery 
on  the  part  of  the  master  or  masters  and  crew;  and  (3) 
losses  to  ship  and  cargo  caused  by  enemies,  or  pirates,  or 
men-of-war. 

The  phraseology  by  which  the  several  losses  covered 
by  a  marine  insurance  policy  are  described  is  copied  from 
Lloyd's  form  of  policy,  and  the  quaint  language  shows 
that  a  long  and  interesting  history  lies  back  of  the  pres- 
ent marine  insurance  contract.  The  clause  in  Lloyd's 
reads  as  follows:  "  Touching  the  adventures  and  perils 
which  the  said  ,  .  .  Insurance  Company  is  contented  to 
bear,  they  are  of  the  seas,  men-of-war,  fires,  enemies,  pi- 
rates, rovers,  thieves,  jettison,  letters  of  mart  and  coun- 
termart, reprisals,  takings  at  sea,  arrests,  restraiuts  and 
detainment  of  all  kings,  jn'iuces,  or  peo])h>  of  wliat  na- 
tion, condition,  or  quality  soever,  barratry  of  the  master 
and  mariners,  and  all  other  ])erils,  losses,  nud  uiisfortuues 
that  have  or  shall  come  to  the  hurt,  detriment,  or  damage 
of  the  said  vessel  (or  goods)  or  any  part  thereof." 


202     OCEAN  AND   INLAND  WATER  TRANSPORTATION 

Marine  insurance  protects  the  insured  against  losses  of 
many  forms.  The  chief  kinds  of  ]ial)ilit_v  assumed  by  the 
marine  underwriter  may  be  indicated  by  defining  four 
terms : 

1.  The  protection  afforded  mav  be  against  "  actual 
total  loss  "  or  ''  constructive  total  loss."  When  the  ob- 
ject insured  is  totally  destroyed,  or  is  so  udk-Ii  damaged 
as  to  be  of  ])ractically  no  value  to  the  insurecL  there  is 
an  "  actual  total  loss."  Sometimes  it  occurs,  'however, 
th^t  the  property  insured,  although  slightly  damaged,  is 
so  placed  as  to  be  of  no  further  valiu^  to  the  insured.  A 
stranded  vessel  may  be  but  slightly  damaged,  and  yet  it 
may  be  necessary  to  abandon  the  ship,  in  which  case  the 
insured  would  give  the  insurer  notice  of  abandonment, 
and  his  contract  would  enable  him  to  secure  the  full 
amount  of  insurance;  his  loss  would  be  a  ''constructive 
total  loss." 

2.  The  second  form  of  liability  which  a  marine  insurer 
may  have  to  meet  is  "'  general  average."  According  to  Dr. 
Huebner,  ''  general  average  may  be  defined  as  covering  all 
those  losses  which  result  from  the  sacrifice  of  any  interest 
voluntarily  made  by  the  master  of  a  vessel  in  time  of  dis- 
tress for  the  common  safety  of  the  ship,  cargo,  and 
freight,  and  which  must  be  repaid  proportionately  by  all 
the  parties  benefited."  It  sometimes  happens  that  a  ves- 
sel is  bliged  to  throw  overboard  part  of  its  cargo  in  order 
to  save  the  vessel  and  the  remainder  of  the  cargo.  In  such 
a  case  justice  requires  that  all  the  parties  carrying  insur- 
ance ujion  the  vessel  and  its  cargo  shouhl  share  in  the 
loss,  tluit  there  shouhl  be  a  "  general  average  "  of  the 
loss. 

8.  The  lial)ility  assumed  by  the  insurer  nmy  provide 
for  the  payment  of  losses  by  "  particular  average."  When 
the  property  insured  is  damaged  by  acciiU'nt,  and  is  not 
destroyed  by  the  master  of  the  vessel  for  the  sake  of  saving 


40 

(VESSEL.) 


gg  iht  gittatttw  ^utual  insurance  (Sl0mpattj|.    Cf  «• 


i^yiPil  11^1 


Sum  3n«iafl), 
$ 


'"Si's  6  J 


la  cue  of  loss  to  be  paid  In  foodi  camnt  bi  the 
Uotte^   SUtes,  or  )d  the  city  o£  Kew  York,  t« 


Do        make  Insoruice,  asd  c 


the 


fOt 


ISO 


0/\r  ACCOUNT  OF 


DtU  the 


to  be  tiunred,  at  tad  £rom 


da^of 


180 


,  At  fioon, 


If  on  &  paasft^  on  the  esplratloa  oE  the  t^ 
to  the  Compiiny  oa  or  before  the  explrati' 
being  raooreJ  ibereiu  i*reoly-four  hours  ia  gi: 
or  Dtbor  clalma  made.     Warranted  not  to  u 
I^WT«QC«,  axcept  between  the  lat  of  June  ai 
of  Paget  Sound  daring  the  period  Insured; 


(excepliag  oa  coastwiae    paoa)^  betw«en  AUauUc  ports  of  the  United  States). 


1,  with  liberty  to  the  assured  to  renew  the  Policy  Cor  one,  two  or  thr«fl  months,  at  the  some  rato  of  premloni,  If  Application  bo  mad* 
of  thd  first  term.  The  risk,  however,  is  to  t«nniaave  at  any  port  at  which  she  may  flrst  anivo  daring  the  tald  ext«nd»d  time,  on  her 
ood  safety  ;  a  pro  rata  premiacn  to  btf  retumod  for  eacQ  eatire  mODth  not  entered  apoa  of  the  extended  tlm»,  there  b«ln^  no  loai 
Lse  porta  on  the  CooUoent  of  Europe  north  of  Hamburg,  between  lit  November  and  1st  March;  cor  the  Golf  of  or  River  SL 
ud  15th  of  September^  nor  foreign  ports  sod  plaofs  in  the  Gulf  of  Mexico,  nor  porta  or  places  on  the  West  coast  of  America  north 
lQ«d  more  than  her  registered    under  deck  toanagc  capacity  with  lead,  marble,  coal,  and  or  Iron,  on  any  one  panage ; 


of  the  gooo _ ^ called  the. 

whereof  is  master  for  this  present  Toyafte^ 
whalevei  other  oame  or  names  the  said  vessel,  or  the 

^Tl^    tt  ahall  and  may  be  lawful  for  the 
or  other  unavoidabiv  a«xld«nt,  without  prejndit 


sabject  to  separate  average. 


opos  the  body,  tackle,  apparel  and  other  fcmitnra. 


or  whoever  else  shall  go  for  master  Id  the  said  veBsel,  or  b; 
^,  Is  or  shaU  be  named  ot  called. 

3  proceed  and  sail  to,  touch  and  stay  at,  any  ports  or  places,  If  tbereooto  obliged  by  nre«  ot  weather 
f  said  vesFel,  tackle,  etc.,  hereby  Insured,  are  valued  at 


without  any  further  accoont  to  be  given  by  the  aasured,  to  the  assnrerf,  or  any  of  them,  for  the  same. 
QDoiUhilTQ  ">c  adventures  and  perilfl  which  <^P^id  ^tlflllttt  JSlUtUSi  JTlJSUl3TUt  C'Oin|iailS  la  cont«nt«d  to  bear,  and  ukea  upon  Itself  in  this 
voyage,  they  are  of  tbe  tfiUi  nm-«/>tMr,  jtr«*,  •nfmiec,  pirit^j  rootri,  tUi«v€i,  jHtiaoiu,  Inters  of  mart  an<j  nimMnnaK,  rtprualt,  tckingt  at  tea,  atrtrft,  rt^nUnU  and 
dtia\nnenU  of  all  kinj/i,  pnneea  or  p^opl*  of  vikai  notion,  oTiuiiiuTft  «r  fuo/ajr  wmtfr,  ft^^rro/ry  of  jA«  viOfSter  and  marinfri^  and  all  other  perils,  losses  and  mifrfortnoeB, 
that  have  or  shall  come  to  the  bart,  detriment  or  damage  of  the  said  ves3el,  or  any  part  thereof.  AND  in  case  of  any  loss  or  misfortune,  It  shall  be  lawful  and  necessary  to 
and  for  the  aasared,  factors,  sarvauts  and  assigns,  to  sue,  labor  and  travel  for,  In  and  about  the  defence,  safeguard  aod  recover;*  of  the  said  vessel,  or  any 

part  tbereof,  without  prejudice  to  this  insarance,  to  tbe  chari^es  whereof,  the  said  insurance  Company  will  conti-ibate  according  to  the  rate  and  qaaollty  of  the  sum  herein 
in£ured,  norshall  the  acta  of  the  lanared  or  Insurers,  In  recovering,  saving  and  prtserving  the  property  Insured,  in  case  of  dli>aeter,  be  considered  a  waiver  or  ao  acceptance  of 
an  abandonment ;  having  bepo  paid  the  consideration  for  this  iosorance,  by  the  assured  or  asdgna,  at  and  after  the  rate  of 


^Itb  lo  case  of  loss,  neb  Ices  to  be  paid  in  thirty  days  after  proof  of  loss,  and  proof  of  Interest  In  tbe  said  (the 

amount  of  tbe  fvot«  given  for  the  premium.  If  unpaid,  being  first  deducted),  but  no  partial  loab  or  particular  averaf^e  shall  fn  any  case  be  paid,  cnleas  amoQDttoj;  10^94  ptr 
eenl.  PROVIDED  ALWAYS,  and  it 's  hereby  further  agreed.  Thai  il  thd  said  assured  shall  have  made  any  o'.tier  asaurance  npon  the  premises  aforesaid,  prior  In  day  of  date 
to  this  policy,  thtn  the  s^d  ATLANTIC  MUTUAL  INSURANCE  COMPANY  shaU  be  answerable  only  for  so  much  as  the  amount  of  such  prior  assurance  may  be  deficient 
towards  fully  covering  the  premises  hereby  asBured;  and  toe  said  ATLANTIC  MUTUAL  ENSURANCE  COMPANY  shftli  return  ihe  premium  upon  so  much  of  the  sum 
by  Ibem  assurtd,  as  they  shall  be  by  such  prior  aEsura&ce  exonerated  from.  AND  In  cae«  of  any  Inmirance  npon  the  said  premises,  subsequent  In  day  of  date  to  tbls 
liolicy.  tht  said  ATLANTIC  MUTUAL  INSUIC^NCE  COMP.^'V  shull  neveUhtl^es  l.e  answerable  for  the  full  extt-nt  of  the  sum  by  Ibem  sul^cril^d  hervlo,  witnoul 
fight  to  claim  conthbutiou  fiom  such  sub^equeDt  aseureia,  and  ebsU  accordirgly  be  entitled  U>  retain,  the  premium  by  them  received,  in  the  same  maooer  as  t{  no  such 
subaeqnent  aseuranco  had  been  made.  Other  Insurance  npon  the  premises  aforesaid,  of  date  the  saoie  day  as  tbb  poli<'y.  shall  be  deemed  simultaneous  hertwttb,  and  the 
said  ATLANTIC  MUTUAL  INSURANCE  COMPANY  shall  not  be  liable  for  more  than  a  ratoble  contribution  In  the  proportion  of  tne  sum  by  (hem  Insured  to  the  a«nn*- 
gate  of  such  siniultaneoufl  Insurance.  IT  IS  ALSO  AGREED,  that  the  property  be  warranted  by  the  assured  fiee  from  any  rharee,  damage  or  loea,  which  may  arire  lo 
consequence  of  a  seizure  or  detention,  Cor  or  on  sccf^unt  of  any  illicit  or  prohibited  trade,  or  any  trade  in  articles  c^^ntraband  of  war.  AND  it  is  further  agreed,  That  In  caae  a 
total  loss  shall  be  claimed,  for  or  00  account  of  any  damage  or  charge  to  the  said  vessel,  the  only  basis  of  ascertaining  her  value  shall  be  her  valoatloo  in  this  policy  ;  and 
if  not  valued  herein,  then  her  actual  value  at  the  time  of  the  Inception  of  this  risk  at  the  purt  to  which  she  then  belonged.  ASD  LASTLY,  It  Is  agreed,  that  If  the 
above  vessel,  upon  a  regular  survey,  should  thereby  be  declared  unsetworthy,  by  reason  of  her  being  uasound  or  rotten,  or  Incapable  of  j^osecutiog  her  voyage  on  account 
of  her  being  unsound  or  rotten,  then  the  assurers  shall  not  be  bound  to  pay  their  eubscriptlou  on  this  Policy. 

EVarrauted  not  to  ubandoo  Id  case  of  capture,  seizure,  or  detention,  until  after  condemnation  of  the  properly  Insured;  nor  ontll  ninety  days  after  notice  of  said  eondrntna* 
tion  if)  given  to  this  Company.  Also  warranted  not  to  abandon  In  case  of  blockade,  and  fr«e  from  any  expense  In  consequence  of  capture,  selxure,  dcientlOD  or  blockade; 
bat  In  the  Kveot  of  blockade,  lo  be  at  liberty  to  proceed  to  an  open  port  aod  there  end  the  voyage. 

3n  blltntU  bjlCrtof,  the  Precldent  or  Vice-President  of  tbe  said  ^tlaUtU  ^Utual  ^nSUtantt  <2Doni{)an2  bafh  bsreoato  nbtcrlbed  bu 
oarnr.  and  tbe  sum  Insured,  and  caused  the  same  to  be  attested  by  their  Secretary,  In    NtbS^^Oltt;   tbe  day  of 

one  thousand  nine  hundred  and 

11  the  voyage  aforesaid  shall  have  been  begun  and  shall  have  terminated  before  tbe  date  ot  this  policy,  then  there  shall  be  00  return  of  premtom  00  accoont  of  soch 
icrmloatloQ  of  the  voyage. 

In  aU  caftia  ot  reton  ot  prcohin^  la  wliole  ot  tn  put,  tma-lal/fm  amf.,  upon  tbe  nm  lonred,  la  10  be  retained  by  the  awurora. 


IHlll 


III?!? 


MARINE  INSURANCE  203 

other  property,  the  loss  must  be  borne  entirely  by  the 
company  or  companies  that  insured  the  particular  prop- 
erty in  question;  the  losses  are  not  paid  according  to 
''  general  average,"  but  by  "  particular  average."  ^ 

4.  The  liability  may  be  for  the  payment  of  salvage. 
Salvage  is  the  reward  granted  by  law  to  those  who  save 
life  and  property  at  sea.  If  a  vessel  in  distress  receives 
relief  from  another  vessel  and  is  towed  to  port,  the  vessel 
giving  the  assistance  may  claim  salvage,  and  the  amount 
legally  due  is  payable  by  the  company  carrying  the  in- 
surance on  the  vessel  to  which  assistance  was  given. 

Marine  insurance  is  so  large  a  subject  that  the  fore- 
going pages  have  attempted  to  discuss  only  its  main 
phases.  Tn  order  to  show  in  detail  the  provisions  in- 
cluded in  typical  marine  insurance  policies,  there  are  ap- 
jieuded  to  this  chapter  a  copy  of  Lloyd's  form  of  policy, 
and  a  specimen  of  an  insurance  policy  on  a  vessel.  The 
vessel  policy  is  one  used  l)y  the  Atlantic  Mutual  Insur- 

'  These  two  paragraphs  relating  to  general  and  particular  average 
contain  only  a  brief  definition  of  the  subject.  Space  does  not  permit 
a  discussion  of  the  topic;  but  the  following  quotation  from  Dr.  Hueb- 
ner's  essay  on  ''  Marine  Insurance  ''  will  indicate  the  relation  of  "  aver- 
age "  to  that  subject:  "It  should  always  be  remembered  that  the 
liability  for  general  average  contribution  and  the  right  to  claim  it  are 
matters  which  are  entirely  independent  of  marine  insurance.  If  no 
insurance  exists  on  any  of  the  property  involved,  the  respective  owners 
must  bear  the  contril)utions  themselves.  If,  however,  the  property 
sacrificed  is  insured,  then  the  underwriter  becomes  liable  for  the  insured 
value,  and  by  paying  the  same  comes  in  possession  of  the  right  to  re- 
ceive the  sums  allowed  in  general  average  after  deducting  the  contri- 
bution which  applies  to  the  interest  he  now  represents.  Moreover,  if 
the  contributing  interests  are  insured,  the  underwriter  is  also  liable  for 
general  average  damage.  But  in  determining  the  extent  of  his  liability 
for  such  contributions  the  insured  value  of  the  property  must  be  taken 
into  account.  If  the  insured  value  is  equal  to  the  value  of  the  contrib- 
uting interests,  the  underwriter  pays  all  the  general  average  contribu- 
tions; but  if  it  is  less,  he  pays  the  contribution  only  in  the  proportion 
which  the  insured  value  bears  to  the  contributory  value." 
15 


204      OCEAN  AND  INLAND  WATER  TRANSPORTATION 

aiice  Company,  of  New  York,  and  is  typical  oi  the  policies 
used  by  all  American  conij)anic'.s.  Persons  desiring  to 
study  the  history  and  law  of  marine  insurance  in  detail 
are  referred  to  the  works  list('(I  hclow. 


REFERENCES    KOIJ    I  rKTUER    READING 

HuEBNER,  S.  "  Marine  Insurance  in  the  United  States."  Annah 
of  the  Aniprican  Academy  of  Political  and  Social  Science, 
vol.  xxvi,  pp.  241-99.  (Di*.  Huebner's  study  is  in  two  parts, 
the  first  part  beinji;  concerned  with  the  "  Development  and 
Present  Status  of  Marine  Insurance  in  the  United  States,"  the 
second  part  with  "  Policy  Contracts  in  Marine  Insurance.") 

l^pon  the  law  of  marine  insurance  many  volumes  have  been  written. 
Among  those  possessing  merit  maj'  be  mentioned  "Marine 
Insurance,"  by  William  (!ow;  and  "The  Law  and  Practice  of 
Marine  Insurance,"  by  .lohn  Duer. 


COPY    OF    LLOYD'S    FORM    OF    POLICY 

S.  G.         Be  it  known  that  as  well  in  own 

= =  name  as  for  and  in  the  name  of  all  and  every 

;£  Other  person  or  persons  to  whom  the  same  doth, 

=====  may,  or  shall  appertain,  in  part  or  in  all,  doth  make 

assurance  and  cause  and  them  and  every 

of  them  to  be  insured,  lost  or  not  lost,  at  and  from 

upon  any  kinds  of  goods  and  merchandises  and  also  upon  the 
body,  tackle,  apparel,  ordnance,  munition,  artillery,  boat,  and 
other  furniture,  of  and  in  the  good  ship  or  vessel  called  the 
,  whereof  is  master,  under  God  tor  this  present  voyage, 
,  or  whosoever  else  shall  go  for  Master  in  the  said 
ship  or  by  whatsoever  other  name  or  names  the  same  ship,  or 
the  Master  thereof,  is  or  shall  be  named  or  called,  beginning 
the  adventure  upon  the  said  goods  and  merchandises  from  the 
loading  thereof  aboard  the  said  ship,  upon  the  said  ship,  her 
tackle,  apparel,  etc.,  and  shall  so  continue  and  endure, 

during  her  abode  there,  upon  the  said  ship,  etc. ;  and  further 
until  the  said  ship,  with  all  her  ordnance,  tackle,  apparel,  etc., 
and  goods  and  merchandises  whatsoever,  shall  be  arrived  at 
port  of  discharge  as  above  and  upon  the  said  ship,  etc.,  until 
she  hath  moored  at  anchor  twenty-four  hours  in  good  safety, 
and  upon  the  goods  and  merchandises  until  the  same  be  there 
discharged  and  safely  landed;  and  it  shall  be  lawful  for  the 
said  ship,  etc.,  in  this  voyage  to  proceed  and  sail  to,  and  touch 
and  stay  at  any  port  or  place  whatsoever,  without 

prejudice  to  this  Insurance.  The  said  ship,  her  tackle,  apparel, 
etc.,  goods  and  merchandise,  etc.,  for  so  much  as  concerns  the 
assured,  by  agreement  between  the  assured  and  assurers  in  this 
Policy,  are  and  shall  be  valued  at 

Touching  the  adventures  and  perils  which  we,  the  Assurers, 
are  contented  to  bear  and  do  take  upon  us  in  this  voyage,  they 
are :  of  the  seas,  men-of-war,  fire,  enemies,  pirates,  rovers, 
thieves,  jettisons,  letters  of  mart  and    countermart,   surprisal, 

205 


206     OCEAN  AND  INLAND  WATER  TRANSPORTATION 

taking  at  sea,  arrests,  restraints,  and  detainments  of  all  Kings, 
Princes,  and  People,  of  what  nation,  condition  or  quality 
soever:  barratry  of  the  Master  and  Mariners,  and  of  all  perils, 
losses,  and  misfortunes,  that  have  or  shall  come  to  the  hurt, 
detriment  or  damage  of  the  said  goods  and  merchandises  and 
ship,  tackle,  apparel,  etc.,  or  any  part  thereof;  and  in  case  of 
any  loss  or  misfortune,  it  shall  be  lawful  to  the  Assured,  their 
factors,  servants,  and  assigns,  to  sue,  labour,  and  travel  for,  in 
and  about  the  defence,  safeguard,  and  recovery  of  the  said 
goods  and  merchandises  and  ship,  etc.,  or  any  part  thereof, 
without  prejudice  to  this  Insurance ;  to  the  charges  whereof 
we,  the  Assurers,  Avill  contribute  each  one  according  to  the 
rate  and  quantity  of  his  sum  herein  assured.  And  it  is  agreed 
by  us,  the  Insurers,  that  this  Writing  or  Policy  of  Assurance 
shall  be  of  as  much  force  and  effect  as  the  surest  Writing  or 
Policy  of  Assurance  heretofore  made  in  Lombard  Street,  or  in 
the  Royal  Exchange,  or  elsewhere  in  London.  And  so  we, 
the  Assurers,  are  contented,  and  do  hereby  promise  and  bind 
ourselves,  each  one  for  his  own  part,  our  heirs,  executors,  and 
goods,  to  the  Assured,  their  executors,  administrators,  and 
assigns,  for  the  true  performance  of  the  premises,  confessing 
ourselves  paid  the  consideration  due  unto  us  for  this  Assur- 
ance by  the  Assured  at  and  after  the  rate  of 

In  Witness  Avhereof  we  the  Assurers  have  subscribed  our 
names  and  sums  assured  in 

{Signatures  of  the  U?iderwriters) 


N.  B. — Corn,  fish,  salt,  fruit,  flour  and  seed  are  warranted  free  from 
Average,  unless  general,  or  the  ship  be  stranded :  sugar, 
tobacco,  hemp,  flax,  hides  and  skins  are  vsrarranted  free  from 
Average  under  Five  Pounds  per  cent.;  and  all  other  goods,  also 
the  ship  and  freight,  are  warranted  free  from  Average  under 
Three  Pounds  per  cent.,  unless  general,  or  the  ship  be  stranded. 


PART  IV 

GOVERXMEXT    AID   AXD    REGULATION 

OF    OCEAX    COM^IERCE    AXD 

TRAXSPORTATIOX 


CHAPTER   XV 

AID    AND    KEGULATIOX    BY    THE    XATIOXAL    GOVERNMENT 

The  ocean  carrier  and  the  service  he  performs  have 
for  centuries  been  the  special  concern  of  every  country 
with  a  seaboard  and  ocean  ports.  The  ocean  being  the 
avenue  of  international  intercourse,  the  highway  connect- 
ing the  home  country  witli  its  colonies  and  dependencies, 
the  theater  of  naval'struggles  epoch-making  in  the  life  of 
^lations  and  in  the  survival  or  downfall  of  types  of  civiliza- 
tion, every  progressive  country  having  maritime  bound- 
aries is  solicitous  that  its  shipping  interests  shall  prosper. 
Some  countries  have  succeeded,  and  others  have  failed, 
in  their  efforts  to  maintain  and  augment  their  position  on 
the  sea;  but  every  country  whose  lands  reach  the  sea  has 
sought,  each  in  its  own  way,  to  establish  conditions  that 
will  enable  its  people  to  seek  wealth  from  the  sea,  and  to 
carry  the  flag  and  prestige  of  the  country  beyond  the 
narrow  confines  of  its  land  domain. 

The  great  nations  of  history  have  usually,  though  not 
always,  been  those  that  have  responded  to  the  call  of  the 
sea.  The  Phoenicians,  the  Greeks,  the  Venetians,  ihc 
Norsemen,  the  Spanish  and  Portuguese,  the  Dutch,  and 
the  English  of  Great  Britain  and  America,  are  examples 
of  people  that  have  made  the  sea  as  w^ell  as  the  land  their 
home,  and  have  thereby  gained  a  large  place  in  the 
world's  history.  The  relation  of  the  sea  to  the  develop- 
ment of  national  greatness  has,  moreover,  become  far 
more  important  to-day  than  it  has  been  in  past  centuries. 

209 


210     OCEAN   AND   INLAND   WATER  TRANSPORTATION 

Tlic  uccaii  ciihlc,  the  stcanisliip,  the  ciioniKHi.s  volume  of 
international  trade,  the  efficiency  of  the  modern  naval 
fleet,  the  i)ossibilities  of  deciding  the  issues  of  war  by 
naval  conflicts,  are  causing  Great  Britain,  Germany, 
France,  and  the  United  States,  Japan,  and  otiier  ])rogress- 
ive  powers,  to  give  more  and  more  attention  to  their 
(••Miimercial  and  shipping  facilities  and  the  strength  and 
efficiency  of  their  naval  forces. 

In  each  country  the  Government's  relation  to  ocean 
transportation  consists  both  of  giving  aid  and  of  enforc- 
ing regulations.  ]\Iethods  and  policies  vary  Avitli  differ- 
ent countries,  each  Government  seeking  to  accomplish  its 
aims  by  methods  of  its  own. 

The  purposes  of  Government  regulation  of  ocean 
transportation  differ  from  those  underlying  public  regu- 
lation of  railroad  transportation.  The  railroad  service  is 
one  in  which  unrcstrahicd  competition  tends  to  produce 
unreasonable  and  inequitable  discriminations  among  per- 
sons and  among  places;  and  if  competition  be  controlled 
by  cooperation  or  combination  of  railway  companies,  the 
public  may  need  protection  against  charges  that  are  un- 
reasonably high  as  well  as  relatively  unjust;  accordingly 
the  public  regulation  of  railroad  transportation  is  pri- 
marily, although  by  no  means  exclusively,  a  question  of 
controlling  or  adjusting  rates  and  fares.  On  the  con- 
trary, the  public  regulation  of  ocean  transportation  does 
not  attemjit  to  control  or  adjust  freight  and  passenger 
charges.  The  service  of  ocean  transportation  is  so  highly 
competitive  that  neither  exorbitant  charges  nor  arbitrary 
discriminations  between  places  are  possible.  Moreover, 
it  would  probably  be  impossible  for  any  country  to  regu- 
late the  charges  of  ocean  carriers,  because  the  service  is 
international,  and  the  vessels  employed  in  the  service  are 
registered  under  many  flags. 

Governments  regulate  shipbuilding  and  ocean  trans- 


REGULATION  BY  THE  NATIONAL  GOVERNMENT     211 

portation  in  order  to  protect  the  lives  and  property  of 
passengers  and  shippers,  to  safeguard  the  welfare  of  sea- 
men, to  insure  the  use  of  harbors  and  port  facilities  by 
all  shippers  and  ocean  carriers  under  tenns  equitable  to 
all  parties,  to  police  the  harbor,  and  to  enforce  such  (piar- 
antine  regulations  as  the  public  health  may  recpiire.  In 
all  particulars,  except  rates  and  fares,  the  ocean  trans- 
portation service  is  subject  to  detailed  public  supervision 
and  control;  the  charges  for  the  service  are  regulated  by 
competition,  and  every  country,  by  making  its  ports  open 
to  all  carriers  on  equal  terms,  insures  the  perpetuation  of 
competition. 

Government  aid  is  given  to  those  interested  in  ship- 
building and  ocean  transportation  for  economic  and  mili- 
tary reasons.  By  fostering  its  shipping  interests  each 
country  hopes  to  increase  its  foreign  trade,  develop  there- 
by its  domestic  industries  and  trade,  and  thus  promote  its 
general  economic  progress.  Moreover,  a  strong  mer- 
chant marine  makes  easier,  if,  indeed,  it  does  not  alone 
nnike  possible,  the  development  of  a  powerful  navy. 
The  needs  of  the  navy  always  constitute  one  of  the 
strong  arguments  in  favor  of  liberal  aid  to  mercliant 
shipping. 

In  the  United  States,  (Tovernnu'ut  assistance  is  given 
to  ocean  transportation  in  four  general  ways:  (1)  The 
Government  improves  or  constructs  harbors,  and  either 
directly  administers,  or  supervises  the  administration  of, 
terminal  facilities.  (2)  It  takes  vai'ious  measni-es  to  in- 
crease the  safety  of  navigation.  (-V)  it  seeks  to  make  the 
service  profitable,  by  giving  American  ships  liberal  ])ay- 
ments  for  carrying  our  foreign  mails,  by  reserving  coast- 
wise and  domestic  traffic  to  American  vessels,  and  1)y  vari- 
ous other  means.  (4)  It  aids  the  shipbuilding  industry 
by  admitting  to  American  registry  vessels  built  only  in 
the  United   States;   by  allowing  our  Iniilders   to  import 


212     OCEAN  AND  INLAND  WATER  TRANSPORTATION 

free  of  duty  materials  used  in  ship  construction,  and  by 
requiring  the  domestic  trade  to  be  carried  in  American 
ships.  The  efforts  of  our  Federal  Government  to  make 
ocean  transportation  profitable  when  carried  on  under 
the  American  flag,  and  to  build  up  a  strong  shipbuilding 
industry  in  the  United  States,  have  not  been  very  suc- 
cessful. The  policy  of  our  Government,  and  of  other 
countries,  toward  shipbuilding  and  the  merchant  marine, 
will  be  considered  at  some  length  in  later  chapters. 

State  governments  and  municipalities,  as  well  as  the 
Federal  Government,  participate  in  the  work  of  aiding 
and  regulating  ocean  commerce.  This  exercise  of  power 
by  three  different  authorities  makes  the  American  system 
of  aiding  and  regulating  ocean  transportation  relatively 
complex,  and  a  description  of  the  system  unavoidably 
somewhat  detailed.  The  activities  of  the  Federal,  State, 
and  city  governments  will  be  described  in  turn. 

Although  this  volume  is  concerned  primarily  with 
transportation  as  distinguished  from  commerce,  the  fol- 
lowing discussion  of  Government  aid  and  regulation  in- 
cludes the  relation  of  the  Government  to  ocean  commerce 
as  well  as  ocean  transportation.  To  aid  transportation  is 
to  facilitate  commerce;  to  increase  commerce  is  to  enlarge 
the  business  of  the  carrier;  to  regulate  either  one  is  to 
influence  the  other;  accordingly,  it  has  seemed  best  not 
to  attempt  to  confine  this  and  the  two  following  chapters 
solely  to  ocean  transjwrtation. 

The  powers  of  the  Federal  Government  over  com- 
merce, and  its  activity  in  aiding  and  regulating  ocean 
transportation,  are  greater  than  those  of  the  States  and 
cities,  and  it  exercises  its  authority  through  a  confusing 
number  of  departments  and  bureaus.  It  will  be  best  to 
name  these  branches  of  the  United  States  Government, 
and  to  explain  briefly  what  service  is  performed  by  each 
of  these  agencies. 


REGULATION  BY  THE  NATIONAL  GOVERNMENT     213 


DEPARTMENTS  AND  BUREAUS  OF  THE  UNITED  STATES 
GOVERNMENT  CONCERNED  WITH  AIDING  AND 
REGULATING    SHIPBUILDING,     MARI- 
TIME COMMERCE,   AND  OCEAN 
TRANSPORTATION 

1.  The  War  Department: 

Corps  of  Engineers  of  the  United  States  Army. 

2.  Department  of  Commerce  and  Labor: 

Lighthouse  Board. 

Coast  and  Geodetic  Survey. 

Bureau  of  Fisheries. 

Fur-Seal  and  Sahnon  Fisheries  of  Alaska. 

Steamboat  Inspection  Service. 

Bureau  of  Navigation. 

Bureau  of  Immigration, 

Bureau  of  Manufactures. 

Bureau  of  Standards. 

Bureau  of  Statistics. 

Bureau  of  the  Census. 

3.  The  Treasury  Department: 

Customs  Service. 

Revenue  Cutter  Service. 

Life-Saving  Service. 

Public  Health  and  Marine  Hospital  Service. 

4.  The  Department  of  Agriculture: 

United  States  Weather  Bureau. 

5.  Navy  Department: 

Hydrographic  Office. 

Inspection  of  Vessels  Awarded  Contracts  for  Carrying  Ocean 
Mails. 
G.  Post-Office  Department: 

Division  of  the  Foreign  IMails. 

7.  The  State  Department: 

United  States  Consular  Service. 
Bureau  of  Trade  Relations. 

8.  Department  of  Justice: 

Enforcement  ot  Laws  of  the  United  States. 


214     OCEAN   AND   INLAND  WATER  TRANSPORTATION 

Eight  of  the  nine  (lc])artiii('iit.s  of  the  executive  branch 
of  the  United  IStates  GovcninK'iit  have  to  do  with  our 
maritime  interests,  the  De])artnient  of  the  Interior  being 
the  only  one  not  included  in  the  a])Ove  table.  The  De- 
])artment  of  Commerce  and  Labor  touches  those  interests 
at  more  points  than  any  other  department  does,  but  the 
War  and  Treasury  Departments  have  a  no  less  vital  con- 
nection with  ocean  commerce  and  transportation. 

The  Corps  of  Engineers  of  the  United  States  Army, 
acting  under  the  Chief  of  Engineers  and  the  Secretary 
of  War,  has  charge  of  river  and  harbor  improvements. 
The  construction  of  breakwaters,  the  excavation  of  chan- 
nels, the  dredging  of  harbors,  the  establishment  of  harbor 
lines  marking  the  limit  beyond  which  piers  and  wharves 
may  not  be  extended  within  harbors,  and  all  other  neces- 
sary engineering  work  connected  with  laying  out,  improv- 
ing, and  maintaining  harbors,  come  under  the  Secretary 
of  War  and  the  United  States  Engineers.  Upon  the  basis 
of  surveys,  estimates,  and  recommendations  made  by  the 
Chief  of  Engineers,  Congress  appropriates  money  for  the 
improvement  of  harbors,  and  the  work  is  executed  under 
the  supervision  of  Army  Engineers. 

The  Department  of  Commerce  and  Labor  has  eleven 
Bureaus,  or  divisions  of  its  activity,  connected  more  or 
less  closely  with  ocean  commerce  and  transportation. 
This,  the  yoimgest  of  the  nine  executive  departments 
that  have  thus  far  been  established,  was  created  by  Con- 
gress, February  14,  1903,  "  to  foster,  promote,  and  de- 
velop the  foreign  and  domestic  commerce,  the  mining, 
manufacturing,  shipping,  and  fishery  industries,  the  labor 
interests,  and  the  transportation  facilities  of  the  United 
States."  To  carry  out  this  extensive  progrannne  of  Gov- 
ernment aid  and  supervision.  Congress  created  two  new 
bureaus — the  bureaus  of  "  Corporations  "  and  "  Manu- 
factures " — and    transferred    to    the    de])artment    various 


REGULATION  BY  THE  NATIONAL  GOVERNMENT     215 

bureaus,  boards,  and  "  services  "  that  had  previously  been 
subject  to  some  other  department,  or  had  been  without  a 
departmental  connection. 

The  Lighthouse  Board  has  charge  of  a  service  that 
antedates  the  work  of  any  other  division  of  the  Depart- 
ment of  Commerce  and  Labor.  August  7,  1789,  Con- 
gress took  over  from  the  States  the  eight  lighthouses  that 
were  then  in  existence,  and  placed  them  under  control 
of  the  Secretary  of  the  Treasury,  who  continued  to  be 
responsible  for  our  lighthouses  until  the  Department  of 
Commerce  and  Labor  was  established  in  lV)03.  Since 
1S52  the  Lighthouse  Board  as  now  constituted  has  had 
charge  of  the  "  Lighthouse  Establishment."  The  board 
consists  of  "  two  officers  of  the  navy,  of  high  rank,  two 
officers  of  the  corps  of  engineers  of  the  army,  and  two 
civilians  of  high  scientific  attainments."  The  board 
elects  its  own  chairman ;  but  "  the  Secretary  of  Commerce 
and  Labor  shall  be  ex-ufjicio  president  of  the  Lighthouse 
Board."  The  law  requires  that  the  board  '"  shall  dis- 
charge all  administrative  duties  relating  to  the  construc- 
tion, illumination,  inspection,  and  superintendence  of 
lighthouses,  light-vessels,  beacons,  buoys,  sea  marks,  and 
their  appendages."  The  country  is  divided  into  districts, 
with  an  inspector  in  charge  of  each  district.  The  board 
has  charge  of  lighting  and  marking  the  channels  leading 
to  harbors,  and  of  marking  the  channels  of  our  larger 
navigable  rivers,  as  well  as  of  the  lighthouses  along  the 
shores  of  the  ocean  and  the  Great  Lakes. 

The  Coast  and  Geodetic  Survey  supplements  the  w^ork 
of  the  Corps  of  Engineers  and  of  the  Lighthouse  Board 
by  preparing  charts  of  the  seacoast  and  of  the  adjacent 
ocean.  Authorized  by  Congress  in  1S07,  the  "  Coast 
Survey  "  was  continuously  connected  with  the  Treasury 
Department  until  1903,  when  it  was  placed  under  the 
Secretary  of  Commerce  and  Labor.     Prior  to  ISoG  it  was 


2I(;     OCEAN   AN]^   INLAND   WATER  TRANSPORTATION 

twice  iiiidcr  llic  Scci'ctiiiT  of  the  Xa\_v  for  a  short  time. 
The  present  organization  of  the  serviee  dates  from  1843; 
the  title  "  Coast  and  (leodetic  Survey  "  was  first  employed 
in  1878.  The  chief  aihiiiiiistrativc  oiHccr  of  the  Coast 
and  Ceodetic  Survey  is  th(!  Su|)erintendent;  the  principal 
oHicc  is  at  Washiuiitou,  aii<l  there  are  stihoffices  at  San 
{''rancisco  aii<l  Alauihi  in  ('hai,i;(^  of  assistants  to  the  super- 
intendent. The  hiw  i'('(|uires  that  "  ofHcers  of  the  army 
and  navy  shall,  as  far  as  practicable,  he  em|)loyed  "... 
"  The  officers  of  the  na\y  to  be  emph)ye<l  on  the  hydro- 
grajdiical  parts,  and  the  officers  of  the  army  on  the  top- 
ographical parts  of  the  work." 

The  maps  prepared  by  the  Coast  and  Cleodetic  Sur- 
vey show  with  great  detail  and  accuracy  the  coast  line, 
the  location  of  shoals  and  bars,  the  depth  of  the  sea 
near  the  shore,  the  location  of  all  channels  and  of  all 
lighthouses  and  buoys,  the  location  and  direction  of  all 
currents,  the  variation  of  the  magnetic  needle;  in  fact, 
the  maps  aim  to  give  the  mariner  all  the  information  he 
needs  to  enter  and  clear  our  ports,  to  navigate  our  coasts, 
and  to  fish  on  the  banks  off  the  coasts  of  the  United 
States  and  British  America.  The  work  of  the  survey  is 
not  confined  to  the  shores  of  the  United  States,  but  has 
covered  the  Pacific  coast  from  San  Diego  to  Panama,  the 
Hawaiian  Islands,  Alaska,  and  now  includes  the  coast  of 
Porto  Rico  and  the  Philippines.  Surveys  have  also  been 
made  of  parts  of  the  coasts  of  Brazil,  Cuba,  and  China; 
the  purpose  of  the  survey  being  to  make,  as  far  as  pos- 
sible, all  the  maps  required  for  the  safety  of  American 
shipping.  The  charts  prepared  by  the  Coast  and  Geo- 
detic Survey  are  "  sold  at  the  cost  of  printing  and  paper." 

Ocean  commerce  is  indirectly  aided,  and  the  business 
of  ocean  transportation  is  increased,  by  the  aid  given  to 
our  maritime  fishing  industry  by  the  Bureau  of  Fisheries 
now  in  the  Department  of  Commerce  and  Labor.     The 


REGULATION  BY  THE  NATIONAL  GOVERNMENT     217 

office  of  Commissioner  of  Fish  and  Fisheries  was  created 
by  Congress  in  1871,  and  the  office  was  an  independent 
branch  of  the  Government  service  until  1903,  when  it 
became  a  bureau  of  the  Department  of  Commerce  and 
Labor.  The  bureau  studies  the  life  history  and  food  of 
the  leading  varieties  of  lish,  stocks  the  lakes,  streams,  and 
coastal  waters  with  young  fish,  and  seeks  to  improve  the 
methods  and  apparatus  of  the  fisheries  industry.  The  bu- 
reau also  "  conducts  investigations  regarding  the  fur-seal 
herds  of  the  Pribilof  Islands  and  the  Bering  Sea."  "  At 
two  points  on  the  Atlantic  coast  are  well-equipped  marine 
biological  stations.  At  various  points  throughout  the 
country  are  thirty-six  fish-cultural  establishments.  In  the 
distribution  of  the  output  of  the  fish  and  eggs,  five  spe- 
cially constructed  railroad  cars  are  usetl.  1  here  are  also 
em])loyed  two  seagoing  steamers  and  one  large  seagoing 
schooner,  as  well  as  two  smaller  steamers  and  seven  steam 
launches  for  river  work.  One  of  the  steamers  is  especially 
equipped  and  adapted  for  deep-sea  investigations." 

The  fur-seal  and  salmon  fisheries  of  Alaska  are  not 
under  the  control  of  the  Commissioner  of  Fish  and  Fish- 
eries, but  are  under  the  direct  supervision  of  the  Secretary 
of  Commerce  and  Labor,  who  appoints  four  agents  to 
oversee  the  seal  fisheries;  and  the  President  ajjpoints 
two  agents  annually  to  visit,  under  the  direction  of  the 
Secretary  of  Commerce  and  Labor,  "  the  Alaskan  salmon 
fisheries  and  canneries,  to  enforce  the  laws  and  regula- 
tions and  re])ort  thereon." 

The  fishing  industry  is  important  not  only  because  it 
afi"ords  a  livelihood  for  those  engaged  in  it,  and  con- 
tri])utes  to  the  general  food  supply  of  the  country,  but 
also  because  it  is  an  industry  that  develops  liardy  seamen, 
and  enables  the  merchant  fleet  and  the  navy  to  secure 
men  for  their  crews  more  readily  than  they  otherwise 
could.     During  the  days  of  the  maritime  greatness  of  the 


218     OCEAN  AND  INLAND  WATER  TRANSPORTATION 

riiitcd  States  the  American  fisheries  were  a  large  indus- 
try, and  now  that  we  are  again  turning  to  the  sea,  there 
are  special  reasons  why  we  should  seek  to  perpetuate  and 
strengthen  our  fisheries. 

The  three  l)ureaus  of  the  Department  of  Commerce 
and  Lahor  most  concerned  with  the  regulation  of  ship- 
])iiig  and  ocean  transportation  are  the  Steamboat-Inspec- 
tion Service,  the  Bureau  of  Navigation,  and  the  Bureau 
of  Innnigration. 

The  chief  work  of  the  Steamboat-Inspection  Service 
is  explained  by  the  title  of  the  bureau.  The  service  dates 
from  18'>8,  and  its  duties  have  been  enlarged  bv  numer- 
ous snbsc(iueiit  laws,  until  it  is  now  charged  with  the  duty 
of  nud<ing  an  annual  inspection  of  the  hulls  of  steamers 
and  sailing  vessels,  of  inspecting  the  materials  used  in 
the  boilers  manufactured  for  steamships,  of  testing  such 
boilers  l)efore  they  may  be  used,  of  licensing  the  oflScers 
of  steamers,  of  inspecting  passenger  steamers  to  decide 
how  many  ]iassengers  may  safely  and  lawfully  be  carried, 
and  to  see  that  all  laws  to  protect  the  lives  of  passengers 
and  crew  are  complied  with,  of  enforcing  the  laws  re- 
garding the  transportation  of  explosives,  and  of  estab- 
lishing such  regulations  regarding  the  construction  and 
operation  of  ships  as  the  laws  permit  and  as  the  safety 
of  the  public  requires.  There  is  a  supervising  Inspector- 
General,  and  there  are  ten  supervising  inspectors  and 
numerous  local  inspectors.  Previous  to  the  establish- 
ment of  the  Department  of  Commerce  and  Labor  the 
service  was  under  the  direction  of  the  Secretary  of  the 
Treasury. 

The  Bureau  of  ISTavigation,  now  in  the  Department  of 
Commerce  and  Labor,  was  transferred  from  the  Treasury 
Department  in  llMi:].  'I^iis  bureau,  which  is  not  to  be 
confused  with  a  bureau  of  the  same  name  in  the  Navy 
Department,  was  created  in  1884,  and  the  Commissioner 


REGULATION  BY  THE  NATIONAL  GOVERNMENT     219 

of  Navigation  at  the  head  of  this  bureau  was  "  given 
plenary  jurisdiction  over  the  commercial  marine  and  mer- 
chant seamen  of  the  United  States,  so  far  as  they  are 
not  subject,  under  the  laws,  to  the  supervision  of  any 
other  authority."  The  numerous  duties  of  the  Commis- 
sioner of  Navigation  comprise  the  registering,  enrolling, 
and  licensing  of  American  vessels,  the  measurement  of 
vessels,  the  interpretation  of  the  tonnage  tax  laws,  the 
listing  and  describing  of  all  American  vessels,  the  issu- 
ance of  '*  instructions  to  the  collectors  of  customs  in  re- 
gard to  the  documenting  of  vessels  and  their  clearance, 
entry,  and  movements,  .  .  .  and  instructions  in  regard 
to  the  entry  of  vessels  into  ports  subject  to  quarantine," 
the  enforcement  of  the  laws  for  the  protection  of  seamen, 
and  the  pul)lieation  of  statistics  relating  to  the  merchant 
marine  and  the  American  shipbuilding  industry.  The 
law  provides  that  the  Connnissioner  of  Navigation  "  shall 
also  investigate  the  operations  of  the  laws  relative  to  nav- 
igation, and  annually  report  to  the  Secretary  of  Com- 
merce and  Labor  such  particulars  as  may,  in  his  judg- 
ment, admit  of  improvement  or  may  require  amendment." 
Concisely  stated,  the  Commissioner  of  Navigation 
keeps  the  public  informed  regarding  the  conditions  and 
needs  of  the  shipbuilding  and  shipping  interests;  he  lists, 
measures,  and  documents  vessels,  aids  the  Treasury  De- 
partment in  enforcing  the  tonnage  tax  laws,  and  pro- 
tects American  seamen.  To  enable  the  Commissioner  of 
Navigation  to  protect  seamen,  the  Secretary  of  Commerce 
and  Labor  is  authorized  to  appoint  at  each  important 
American  port  a  shipi)ing  commissioner,  whose  general 
(hities  are  to  kec])  a  regist<M'  of  the  men  who  may  desire 
to  engage  as  seamen,  "  \o  snperintend  their  engagement 
ancl  discharge  in  nninner  ])roscribed  by  law,"  to  aid  the 
masters  of  vessels  in  compelling  the  seamen,  who  have 
been  engaged,  to  be  on  board  shi[)  at  the  agreed  time,  and 
16 


220      OCEAN   AND  INLAND  WATER  TRANSPORTATION 

"  to  facilitate  the  making  of  apprenticeships  to  the  sea 
service."  At  a  port  where  there  is  no  sliipi)ina'  commis- 
sioner these  duties  devolve  upon  the  collector  of  the  port. 

The  annual  report  of  the  Commissioner  of  Xavigation 
is  a  most  instructive  document.  The  volume  contains  not 
only  elaborate  statistical  information  regarding  our  ship- 
building industry  and  the  merchant  fleet  under  the  Amer- 
ican flag,  but  also  a  careful  discussion  of  the  needs  of 
our  shipping  interests  and  of  the  laws  required  for  the 
promotion  of  the  business  of  building  and  operating  ships. 
The  student  of  the  controverted  questions  of  maritime 
policy  will  find  these  annual  volumes  his  best  source  of 
information. 

The  Bureau  of  Immigration,  transferred  from  the 
Treasury  Department  to  the  Department  of  Commerce 
and  Labor  in  1903,  has  become  of  great  importance  to 
the  people  of  the  United  States.  As  long  as  the  number 
of  immigrants  was  relatively  small,  and  as  long  as  they 
came  mainly  from  northern  Europe,  the  need  of  restrict- 
ive measures  w^as  not  felt;  but  with  the  arrival  in  a  single 
year  of  over  a  million  foreigners,  mainly  from  central 
and  southern  Europe,  the  United  States  has  been  obliged 
to  protect  itself  by  laws  intended  to  shut  out  the  paupers, 
criminals,  and  other  objectionable  persons  borne  to  our 
shores  by  this  rising  tide  of  immigration. 

Until  1891,  the  laws  of  the  United  States  regarding 
immigrants  were  enforced  by  State  oflicials  ''  designated 
by  the  governors  of  the  respective  States,  under  the  di- 
rection and  control  of  the  Secretary  of  the  Treasury." 
The  expenses  incurred  in  this  administration  by  State 
officials  was  met  from  the  "  Immigrant  Fund  "  provided 
for  by  congressional  appropriation.  In  1891  Congress 
took  the  administration  away  from  the  States  and  put 
it  under  a  Superintendent  of  Immigration,  and  in  1895 
changed  the  title  to  Commissioner-General  of  Tmmio;ra- 


REGULATION  BY   THE  NATIONAL  GOVERNMENT     221 

tion,  and  made  his  office  the  Bureau  of  Immigration.  At 
this  time  the  Bureau  of  Immigration  was  also  charged 
with  the  enforcement  of  the  hiws  against  alien  contract 
labor.  In  1900  the  administration  of  the  Chinese  exclu- 
sion law  was  nuide  one  of  the  duties  of  the  Commissioner- 
Genera  L 

The  Bureau  of  Manufactures  is  a  new  office  that  was 
created  when  the  Department  of  Commerce  and  Labor 
was  estaldished  in  1903.  It  is  the  duty  of  this  bureau 
"'  to  foster,  promote,  and  develop  the  various  manufactur- 
ing industries  of  the  United  States,  and  uuirkets  for  the 
same  at  home  and  abroad,  domestic  and  foreign,  by 
gathering,  compiling,  publishing,  and  supplying  all  avail- 
able and  useful  information  concerning  such  industries 
and  such  markets,  and  such  other  methods  and  means  as 
may  be  prescribed  by  the  Secretary  or  provided  by  law." 

The  Consular  Division  of  the  Bureau  of  Manufac- 
tures now  secures  commercial  and  industrial  information 
from  the  consuls  and  publishes  their  reports.  The  Con- 
sular Service  being  under  the  State  Department,  all  in- 
structions to  the  consuls  calling  for  reports  are  issued  by 
the  State  Department  upon  the  request  of  the  Chief  of 
the  Bureau  of  Manufactures  in  the  Department  of  Com- 
merce and  Labor.  The  instructions  sent  to  the  consuls 
are  formulated  in  the  Bureau  of  Trade  Relations  of  the 
Department  of  State,  and  the  consuls  report  to  the  Chief 
of  the  Bureau  of  Trade  Relations,  who  has  authority  to 
edit  these  reports  as  he  may  deem  wise  for  diplomatic  or 
other  reasons,  and  then  to  transmit  to  tlie  Bureau  of 
Manufactures  "  such  information  as  pertains  to  the  De- 
partment of  Commerce  and  Labor." 

The  commercial  and  industrial  information  received 
from  the  consuls  is  given  ])ublicitv  by  means  of  four  pub- 
lications: (1)  '"  The  Daily  Consular  and  'I'rade  Reports"; 
(2)   "The  Monthly   C\)nsular  and  Trade   Iteports";    (3) 


222     OCEAN  AND  INLAND  WATER  TRANSPORTATION 

an  annual  volume  called  the  "  Commercial  Relations  of 
the  United  States,"  consisting  of  the  annual  reports  of 
the  consuls,  accompanied  l)y  a  yearly  review  prepared  by 
the  Chief  of  the  Bureau  in  cliarge  of  the  consular  reports; 
and  (4)  special  volumes  containing  the  rejjorts  sent  in 
by  the  consuls  upon  some  particuhir  subject,  in  accord- 
ance with  instructions  from  the  State  Department.  Prior 
to  1903  these  reports  were  published  under  the  direction 
of  the  Bureau  of  Foreign  Connuerce  in  the  l)ej)artment 
of  State;  now  they  are  issued  by  the  Ibircau  of  Manu- 
factures of  the  Department  of  Connuerce  and  Labor. 
The  reports  are  prepared  and  published  to  aid  our 
manufacturing,  commercial,  and  shipping  interests,  by 
keeping  them  informed  regarding  the  development  of 
productive  processes  in  foreign  coimtries,  and  the  oppor- 
tunities for  increasing  our  trade  abroad. 

Although  the  beginnings  of  our  consular  service  go 
back  to  1776,  thus  antedating  the  establishment  of  the 
Federal  Government  under  the  Constitution,  the  system- 
atic and  regular  publication  of  the  reports  made  by  the 
consuls  was  not  provided  for  by  Congress  until  1856.  In 
1842  Congress  had  made  it  the  duty  of  the  Secretary  of 
State  to  lay  before  Congress  annually  the  information 
obtained  from  the  consuls,  but  adequate  provision  was  not 
made  for  enabling  the  Secretary  of  State  to  perform  this 
duty  until  1856,  when  Congress  created  the  office  of  Su- 
perintendent of  Statistics,  in  the  State  Department.  In 
1874  the  Statistical  Office  became  the  Bureau  of  Statis- 
tics, and  in  1898  the  title  of  the  office  was  again  changed, 
and  named  the  Bureau  of  Foreign  Commerce,  in  order 
to  avoid  confusing  this  bureau  of  the  State  Department 
with  the  Bureau  of  Statistics  in  the  Treasury  Department. 
In  1903  the  Bureau  of  Foreign  Commerce  was  consoli- 
dated with  the  Bureau  of  Statistics,  which  was  transferred 
from   the   Treasury  Department  to   the   Department   of 


REGULATION  BY  THE  NATIONAL  GOVERNMENT     223 

Commerce  and  Labor.  At  the  same  time  the  Bureau  of 
Trade  Relations  was  created  in  the  State  Department,  to 
formuhite  instructions  to  consuls,  and  to  receive  their  re- 
ports for  transmission  to  the  Department  of  Commerce 
and  Labor. 

Of  the  other  bureaus  mentioned  in  the  table  under 
the  Department  of  Commerce  and  Labor,  but  brief  men- 
tion need  be  made.  The  Bureau  of  Standards  was  cre- 
ated by  Congress  in  1901,  having  been  preceded  for  nine 
years  by  the  Office  of  Construction  of  Standard  Weights 
and  Measures,  connected  with  the  Coast  and  Geodetic 
Survey.  The  function  of  the  Bureau  of  Standards  is  to 
promote  the  progress  of  engineering,  manufacture,  and 
commerce,  by  standardizing  weights  and  measures,  and  by 
being  "  a  source  of  mformation  along  scientific  lines." 
"  Two  laboratories,  suitably  equipped  for  carrying  on 
investigations  and  measuring  instruments  of  all  kinds," 
are  located  in  the  suburbs  of  Washington.  The  bureau 
staff  consists  of  a  director  and  a  corps  of  physicists  and 
chemists. 

The  Bureau  of  Statistics  tabulates  and  publishes  de- 
tailed statistics  of  the  imports  and  exports  of  the  United 
States,  and  of  the  entrances  and  clearances  of  vessels  at 
our  ports.  The  data  for  these  tables  are  secured  by  the 
collectors  of  the  ports  in  enforcing  the  tariff  and  naviga- 
tion laws  of  the  United  States.  The  collection  and  pub- 
lication of  these  statistics  was  authorized  by  Congress  in 
1820,  and  a  Division  of  Commerce  and  Navigation  was 
established  in  the  Treasury  Department.  In  1866  this 
division  became  the  Bureau  of  Statistics;  since  1875  it 
has  been  intrusted  with  the  publication  of  the  statistics 
of  internal  commerce,  other  than  by  railroad,  and  since 
1892  the  statistics  of  imports  and  exports  by  railroad  as 
well  as  by  vessels  have  been  included.  The  reports  of 
the  bureau  now  cover  our  entire  foreign  trade,  the  sta- 


224     OCEAN   AND   INLAND   WATER  TRANSPORTATION 

tistit's  of  wliicli  lire  I'cadiiy  ciillcctcil  at  our  custoius 
houses;  \>\\\  no  systematic;  organization  tor  collecting  the 
statistics  of  our  domestic  water  coiniuerce  has  been  pro- 
vided for  by  Congress,  hence  the  rejmrts  of  the  bureau 
.regarding  our  domestic  trade  are  incomplete.  The  bu- 
reau publishes  an  annual  report  in  two  (piarto  volumes, 
and  also  a  monthly  ''  Sunnnary  of  Commerce  and  Fi- 
nance," in  wlii(di  are  included  not  only  the  statistical 
tables  regarding  our  trade,  but  also  monographs  dealing 
in  turn  with  various  American  industries,  and  with  the 
industrial  and  commercial  conditions  of  numerous  foreign 
countries. 

The  Bureau  of  the  Census,  in  the  Dejjartment  of 
Commerce  and  Labor,  is  the  chief  agency  by  which  the 
United  States  Government  collects  and  publishes  statis- 
tics. It  has  been  a  permanent  bureau  only  since  1902; 
prior  to  that  time  the  Census  Office  had  an  intermittent 
existence,  being  recreated  each  ten  years  by  Congress  to 
take  the  decennial  census.  The  decennial  enumeration  of 
population  required  by  the  Constitution  has  come  by 
gradual  enlargement  of  the  scope  of  the  census  to  include 
comprehensive  social,  industrial,  and  commercial  statistics, 
accompanied  by  monographic  texts  interpreting  the  statis- 
tical tables,  and  presenting  nnich  historical  and  economic 
data.  The  Act  of  1902,  creating  a  permanent  Census  Of- 
fice, provides,  among  other  things,  for  the  collection  each 
ten  years  of  the  statistics  of  transportation  by  water,  and 
for  the  collection  of  such  additional  statistics  relating  to 
transportation  as  Congress  may  from  time  to  time  require. 
It  is  probable  that  the  Census  Bureau  will  in  time  l)e  in- 
trusted with  the  ])nblication  of  all  the  statistics  of  navi- 
gation, trade,  and  commerce,  other  than  traffic  by  rail; 
because  such  a  consolidation  of  the  statistical  work  of  the 
Government  would  add  to  the  economy  and  accuracy  of 
our  official  statistical  work. 


REGULATION   BY  THE  NATIONAL   GOVERNMENT     225 

Although  the  Act  of  Congress  of  1903  creating  the 
Department  of  Commerce  and  Labor  took  away  from  the 
Treasury  Department  most  of  the  bureaus  having  to  Jo 
with  commerce,  there  still  remain  under  the  Secretary  of 
the  Treasury  four  important  bureaus  concerned  with  the 
regulation  and  aid  of  ocean  commerce.  One  of  these 
four  is  the  Customs  Service,  which  affects  ocean  com- 
merce more  vitally  than  does  any  other  l:>ureau  l)y  which 
our  foreign  trade  is  regulated. 

At  each  important  port  there  is  a  collector,  who  has 
numerous  responsible  duties,  including  the  appraisement 
of  imports  and  the  collection  of  the  tariff  duties,  the  col- 
lection^ of  tonnage  taxes  on  shipping,  the  enforcement  of 
the  various  laws  regarding  the  entrance  and  clearance  of 
vessels,  and  the  collection  of  the  statistics  of  imports  and 
exports,  and  of  the  tonnage  of  the  vessels  that  enter  and 
clear  each  port. 

The  formalities  to  be  complied  with  by  the  master  of 
a  vessel  before  clearing  from  a  port  were  described  in 
the  chapter  on  the  Freight  Service;  the  final  permission 
to  sail  is  given  by  the  Collector  of  the  Port,  who  issues 
the  clearance  papers  after  the  master  of  the  ship  has  made 
out  or  secured  all  the  papers  required  by  law.  Upon 
entering  a  port,  the  master  must  first  satisfy  the  State  or 
jSTational  quarantine  authorities,  and  then,  before  begin- 
ning to  unload  cargo,  the  master  of  the  vessel  "  must 
l)resent  his  clearance  papers  (from  the  port  from  which 
he  sailed)  and  register  to  the  Collector  of  tlic  I'oi-t,  who 
holds  them,  or  a  consul's  re('ei})t  for  them,  until  the  sliij) 
is  ready  to  depart.  Thus  the  collector,  the  representative 
of  the  custom's  authority,  keeps  the  ship  under  his  control 
during  the  whole  of  the  time  that  cargo  is  being  dis- 
charged and  loaded."  ^ 

The  Revenue-Cutter  Service  assists  the  customs  offi- 

^  J.  Russell  Smith,  "  Orcanization  of  Ocean  Commerce,"  p.  112. 


22G      OCEAN  AND  INLAND  WATER  TRANSPORTATION 

cials  ill  the  eiiforceiiient  of  the  revenue  laws,  aids  the 
Department  of  Coinmeree  and  Lal»or  in  enforcing  the 
navigation  hiws,  assists  vessels  in  distress,  cooperates  with 
and  supervises  the  life-saving  corps,  supervises  the  con- 
struction of  life-saving  stations,  and  i-cnioves  dei'clicts 
from  the  path  of  ocean  commerce.  In  11)04  there  were 
40  vessels,  including  14  vessels  and  launches  for  harbor 
service  and  '2i')  cruisers,  in  commission  in  the  Revenue- 
Cutter  Service,  which  covers  the  entire  seaboard  of  the 
United  States,  the  Bering  Sea,  Arctic  Alaska,  and  parts 
of  the  waters  of  Hawaii.  During  that  year  the  service 
rescued  24  people  from  drowning,  took  on  board  and 
cared  for  47  persons,  and  gave  aid  to  1,21Y  perspns  on 
board  of  the  154  vessels  in  distress  to  which  assistance 
was  given.  The  Revenue-Cutter  Service  was  organized 
in  1790,  eight  years  before  the  Navy  Department  was 
created. 

The  Life-Saving  Service  dates  from  1848,  since  which 
time  it  has  steadily  increased  in  the  range  and  efficiency 
of  its  useful  and  humane  work.  In  1904  the  establish- 
ment comprised  273  stations,  including  196  on  the  At- 
lantic and  Gulf  coasts,  16  on  the  Pacific  coast,  60  on  the 
Great  Lakes,  and  1  at  the  Falls  of  the  Ohio  River.  Dur- 
ing the  year  the  service  gave  assistance  in  359  disasters 
to  documented  vessels  and  411  disasters  to  small  sailboats 
and  rowboats.  Li  these  770  disasters  the  lives  of  3,328 
persons  were  endangered;  all  but  50  of  the  A'essels  and 
boats  were  saved,  and  all  but  34  persons  w^ere  rescued. 
Assistance  of  more  or  less  importance  was  also  given  to 
291  other  vessels.  There  were  103  persons  not  on  board 
vessels  who  were  saved  from  drowning,  and  "  many  lives 
and  a  large  amount  of  property  are  annually  saved  by  the 
Avarnings  given  by  the  patrolmen  and  station  lookouts  to 
vessels  which  are  discovered  running  into  danger.  Dur- 
ing the  fiscal  year  there     were  161  such  cases  reported, 


REGULATION  BY  THE  NATIONAL  GOVERNMENT     227 

148  of  which  were  by  night  and  13  during  the  daytime, 
in  thick  weather." 

Along  the  dangerous  coasts  the  lifc-sa^^ng  stations 
are  only  a  few  miles  apart,  and  men  patrol  the  coast 
during  storms.  The  stations  are  connected,  and  "  the 
lines  are  so  connected  with  the  commercial  centers  that 
telegraph  and  telephone  facilities  are  avaihil)le  to  under- 
writers and  shipowners,  and  communication  can  be  had 
when  necessary  with  the  lighthouses  and  offices  of  the 
AVeather  Bureau."  Plans  are  now  maturing  whereby  the 
life-saving  stations  will  be  connected  by  wireless  teleg- 
raphy, and  will  be  able  to  communicate  with  the  revenue 
cutters,  which  are  likewise  to  be  equipped  for  wireless 
telegraphing. 

The  other  service  under  the  Secretary  of  the  Treas- 
ury requiring  notice  is  the  Public  Health  and  Marine 
Hospital  Service,  which  was  established  by  Congress  in 
1798.  This  service  is  in  charge  of  a  surgeon-general  and 
a  large  surgical  staff.  There  were,  in  1904-,  twenty-two 
Government  hospitals  and  122  relief  stations,  the  number 
being  increased  as  necessary  from  time  to  time.  The 
Public  Health  and  Marine  Hospital  Service  makes  physi- 
cal examinations  of  men  for  other  branches  of  the  Gov- 
ernment service  when  requested  to  do  so;  its  medical 
inspectors  examine  the  immigrants,  to  enforce  the  immi- 
gration laws;  it  has  officers  in  Naples,  Quebec,  Van- 
couver, Victoria,  and  China  and  Japan,  to  examine  aliens 
leaving  for  our  country.  In  the  hospitals,  14,303  per- 
sons were  treated  in  1904,  and  there  were  44,253  out- 
patients in  1904.  The  revenues  from  the  tonnage  taxes 
are  used  for  the  support  of  the  Marine  Hospital  Service. 

Although  the  several  States  can  and  do  maintain 
health  and  quarantine  establishments,  the  United  States 
also  has  quarantine  officers,  under  the  Surgeon-General 
of  the  Public  Health  and  Marine   Hospital  Service,   at 


228     OCEAN   AND  INLAND   WATER  TRANSPORTATION 

forty  stations  on  the  Atlantic,  Gulf,  and  Pacific  coasts. 
Our  Government  also  has  quarantine  stations  at  the  prin- 
cipal ports  of  Porto  Rico,  Hawaii,  and  the  Philippine 
Islands.  At  five  Cuban  ports,  and  at  seven  fruit  porte 
of  Central  and  South  Ainoricn,  I'liited  States  medical 
officers  inspect  vessels  hound  tor  the  Ignited  States  or  our 
insular  possessions.  We  also  have  officers  stationed  at 
La  Guayra,  Venezuela,  Callao,  Peru,  and  Guayacpiil, 
I'A'uador,  who,  together  with  the  United  States  consuls  at 
these  ports,  inspect  vessels  and  sign  bills  of  health  of  ves- 
sels leaving  for  the  United  States  and  for  the  ports  of 
Colon  and  Panama.  Whenever  an  epidemic  breaks  out 
in  any  part  of  the  United  States  the  Xational  authorities 
offer  to  coojDerate  with  the  State  health  officers  to  check 
the  disease.  A  good  instance  of  this  cooperation  was 
afforded  in  1905  at  the  time  of  the  yellow  fever  epidemic 
in  New  Orleans  and  other  Gulf  ports. 

As  commerce  brings  into  ever  closer  and  more  inti- 
mate connection  all  parts  of  the  world,  the  necessity  for 
guarding  against  the  spread  of  diseases  becomes  increas- 
ingly strong.  The  more  perfectly  the  public  health  offi- 
cers can  localize  and  control  contagious  and  infections 
diseases,  the  less  suffering  there  will  be  from  the  diseases, 
and  the  less  interruption  there  will  be  to  the  currents  of 
domestic  and  international  trade.  The  iSTational  Govern- 
ment, having  authority  throughout  our  country,  is  better 
able  to  deal  with  quarantine  and  ht'alth  problems  than 
the  States  are,  and  the  tendency  is  for  the  States  to  turn 
over  the  qiuirantine  administration  to  the  United  States. 

The  dangers  to  which  shipping  is  exposed  from  storms 
have  been  largely  reduced  by  the  forecasts  and  storm 
warnings  issued  by  the  Weather  Bureau,  which  since 
1891  has  been  connected  with  the  Department  of  Agri- 
culture. The  law  of  1890  reorganizing  the  bureau  pro- 
vided that  it  "  shall  have  charge  of  the  forecasting  of 


REGULATION   BY  THE  NATIONAL  GOVERNMENT     229 

weather,  the  issue  of  storm  warnings,  the  display  of 
Aveather  and  flood  signals  for  the  benefit  of  agriculture, 
commerce,  and  navigation,  the  gauging  and  reporting  of 
rivers,  the  maintenance  and  operation  of  seacoast  tele- 
graph lines,  and  the  collection  and  transmission  of  marine 
intelligence  for  the  benefit  of  commerce  and  navigation." 
The  Chief  of  the  Weather  l>ureau  states  that  of  the  vai'i- 
ous  warnings  issued  by  the  Weather  Service,  "  those  of 
storms  and  hurricanes,  issued  for  the  benefit  of  marine 
interests,  are  the  most  important  and  pecuniarily  valuable. 
Storm  warnings  are  displayed  at  nearly  300  points  along 
the  Atlantic,  Pacific,  and  Gulf  coasts,  and  the  shores  of 
the  Great  Lakes,  including  every  port  and  liarl)or  of  any 
considerable  importance;  and  so  nearly  perfect  has  this 
service  become,  that  scarcely  a  storm  of  marked  danger 
to  maritime  interests  has  occurred  for  years  for  which 
ample  warnings  have  not  been  issued  from  twelve  to 
twenty-four  hours  in  advance.  The  reports  from  the 
West  Indies  are  especially  valuable  in  this  connection,  as 
they  enable  the  bureau  to  forecast  with  great  accuracy 
the  approach  of  those  destructive  hurricanes  which,  dur- 
ing the  period  from  July  to  October,  are  liable  to  sweep 
the  Gulf  and  Atlantic  coasts.  The  sailings  of  the  im- 
mense number  of  vessels  engaged  in  our  ocean  and  lake 
traffic  are  largely  determined  by  these  warnings,  and  those 
displayed  for  a  single  hurricane  are  known  to  have  de- 
tained in  port  on  our  Atlantic  coast  vessels  valued, 
with  their  cargoes,  at  over  $30,000,000." 

jMasters  or  owners  of  vessels  desiring  information  re- 
garding expected  weather  conditions  have  only  to  apply 
to  the  nearest  storm-warning  displayman  of  the  United 
States  Weather  Bureau,  who  is  authorized  to  telegraph  to 
a  weather  station  for  the  information,  without  expense 
to  the  applicant.  The  observers  at  the  coast  stations 
cooperate   with    the   Life-Saving   Service,    and   there   are 


230     OCEAN  AND  INLAND  WATER  TRANSPORTATION 

luuneroii.s  instances  of  vessels  or  crows  ])einf^  rescued  that 
would  have  been  lost  had  not  their  need  of  assistance  been 
discovered  and  reported  by  the  weather  observers. 

The  seacoast,  the  adjacent  islands,  and  the  floor  of  the 
ocean  near  the  land  are  surveyed  and  charted  by  the 
United  States  Coast  and  Geodetic  Survey,  now  a  part  of 
the  Department  of  Commerce  and  Labor;  but  the  oceans 
from  shore  to  shore  are  charted  at  frequent  intervals 
by  the  Hydrographic  Office  attached  to  the  Bureau  of 
Navigation  in  the  Navy  Department.  Monthly  charts 
are  published  covering  the  North  Pacific  and  North  At- 
lantic, and  a  weekly  bulletin  issued  regarding  the  North 
Atlantic.  These  charts  locate  not  only  the  fixed  dangers 
to  navigation,  but  also  those  that  are  shifting  or  tempo- 
rary, such  as  ice  floes  and  derelicts.  As  Dr.  Smith  says: 
"  In  addition  to  the  floating  obstructions,  the  chart  for 
any  particular  month  gives  the  track  followed  by  a  large 
number  of  storms  that  have  occurred  in  that  month  in 
preceding  years;  the  relative  amounts  of  fog  that  may 
be  expected  in  certain  regions;  the  prevalent  wind  force 
and  directions;  the  ocean  currents;  the  variations  of  the 
magnetic  needle  from  the  true  north;  and,  lastly,  the  ex- 
act routes  to  be  followed  by  steamers  and  sailing  vessels 
in  making  their  various  voyages  across  the  ocean." 

The  data  for  these  maps  are  secured  mainly  from 
the  captains  of  the  vessels,  who,  upon  arrival  at  an  Amer- 
ican port,  report  to  the  oflicials  of  the  Hydrographic  Of- 
fice the  location  of  all  obstructions  passed  on  the  voyage. 
Reports  of  the  outbound  voyages  are  now  being  cabled 
back  to  the  United  States  from  some  foreign  ports.  The 
captains  making  voluntary  reports  receive  free  of  charge 
such  pilot  charts  as  they  may  need;  other  persons  may 
obtain  the  charts  for  the  cost  of  the  printing  and  paper. 

The  Hydi'ographic  Oftice  was  created  as  a  distinct 
bureau  upon  authority  granted  by  Congress  in  1842,  when 


REGULATION   BY  THE  NATIONAL  GOVERNMENT     231 

the  act  was  passed  establishing  a  United  States  Naval 
Observatory  and  the  Hydrographic  Office.  "  In  186G 
Congress  authorized  the  establishment  of  a  separate  hy- 
drographic  office,  to  be  attached  to  the  Bureau  of  Navi- 
gation in  the  Navy  Department,  for  the  ))ur]iose  of 
supplying  nautical  publications  and  infornuition  not  only 
to  vessels  of  the  United  States,  but  to  navigators  gen- 
erally." 

The  Post-Office  Department,  through  the  Foreign 
Mail  Service,  assists,  and  to  some  extent  regulates,  the 
business  of  ocean  transportation.  The  assistance  given  to 
ocean  carriers  by  our  post  office  was  explained  in  a  pre- 
vious chapter,  where  it  was  pointed  out  that  the  United 
States,  and  practically  all  countries,  pay  ships  of  their 
own  flag  higher  rates  than  they  give  vessels  under  foreign 
flags  for' carrying  the  ocean  mails. 

Before  the  Postmaster-General  can  make  a  contract, 
under  the  Act  of  March  3,  1891,  with  a  company  for 
carrying  mails  in  vessels  of  the  first,  second,  or  third 
class,  as  they  arc  defined  in  the  law,  the  vessels  must  be 
inspected  by  a  naval  officer  or  constructor  designated  by 
the  Secretary  of  the  Navy.  The  law  rerpiires  that  the 
vessels  of  these  classes  "  shall  be  constructed  wuth  partic- 
ular reference  to  prompt  and  economical  conversion  into 
auxiliary  naval  cruisers,  and  iiccordiiig  to  plans  and  speci- 
fications to  be  agreed  upon  by  and  between  the  owners 
and  the  Secretary  of  the  Navy."  This  law  has  given  the 
Navy  Department  some  regulative  influence  upon  our 
merchant  fleet;  but  the  uumlx-r  of  vessels  carrying  mails 
under  this  law  is  so  small  that  the  influence  of  the  navy 
upon  the  construction  of  our  mercantile  vessels  has  been 
slight. 

The  Department  of  State  comes  into  touch  with  com- 
merce and  ocean  shipping  through  the  Consular  Service 
and  the  Bureau  of  Trade  Relations,  as  explained  above. 


232     OCEAN  AND   IM.AM)   W  AIEIt  TRANSPORTATION 

riic  Aiiicricaii  coilsiiIs  arc  oiiiccrs  that  llic  United  States 
maintains  in  the  leading  seaports  and  e(jniniercial  centers 
of  foreign  countries  not  only  to  promote  our  foreign 
trade,  but  also  to  assist  in  the  enforcement  of  our  revenue 
laws,  to  protect  the  rights  of  American  seamen  and  vessel 
owners,  and  t(»  assist  our  iliplomatic  oHiccrs  in  atfoi-ding 
protection  to  the  personal  and  propertv  rights  nt  Anici-ican 
citizens  who  may  he  residing  or  traveling  ahroarl.  The 
instructions  from  the  State  Department  to  consuls  regard- 
ing connnercial  reports  are  formulated  hy  the  Bureau  of 
Tj-adc  Relations,  which  also  receives  the  consular  reports, 
as  has  been  explained. 

The  Department  of  Justice  is  related  to  ocean  com- 
merce and  transportation,  as  it  is  to  all  other  economic 
interests,  its  duty  being  to  assist  the  President  and  the 
Federal  courts  in  the  enforcement  of  the  laws  of  the 
United  States. 

This  brief  description  of  the  aid  and  regulation  of 
ocean  commerce  and  transpf)rtation  by  the  Federal  Gov- 
ernment, and  of  the  several  agencies  by  which  the  aid  is 
given  and  the  regulation  is  exercised,  shows  that  the 
United  States  has  developed  a  comprehensive  and,  in 
many  respects,  a  generous  policy  toward  the  maritime  in- 
terests of  the  American  people.  The  extent  to  which 
American  shipbuilders  and  American  shipowners  have 
succeeded  or  failed  to  succeed  under  this  policy,  the 
causes  of  the  retarded  development  of  the  shipbuilding  in- 
dustry in  the  United  States,  the  reasons  why  the  tonnage 
engaged  in  over-sea  transportation  under  the  American 
flag  is  disappointingly  small,  and  the  changes  that  have 
been  proposed  in  our  mercantile  policy,  will  be  considered 
in  later  chapters.  Before  faking  up  the  discussion  of 
national  policy  it  will  be  best  to  study  the  powers  and 
activities  of  the  States  and  mnnicijialiticvs  as  regards  the 
aid  and  regulation  of  ocean  connuerce  and  transportation. 


REGULATION  BY  THE  NATIONAL  GOVERNMENT     233 


REFERENCES  FOR  FURTHER  READING 

"Organization  and  Law  of  the  Department  of  Commerce  and 
Labor."  Prepared  under  the  direction  of  the  Secretary. 
1904.  (A  volume  of  716  pages,  containing  the  history  and 
present  law  of  the  Department  and  each  Bureau.) 

Annual  Reports  of  the  Secretary  of  the  Treasmy. 

"  Laws  of  the  United  States  Relating  to  Na\'igation  and  the  Mer- 
chant Marine."  1903.  (This  comj^ilation  of  laws  is  pub- 
lished each  few  years  by  the  Commissioner  of  Na\'igation. 
The  last  issue  was  in  1903.) 

Fairlie,  John  A.  "The  National  Administration  of  the  United 
States  of  America."     1905. 

O'Connor,  W.  D.     "The  United  States  Life-Saving  Service." 

"Appleton's  Annual  Cyclopaedia,  1878." 

The  annual  reports  of  several  of  the  bureaus  descril:)ed  in  this 
chapter  contain  a  great  amount  of  valuable  material.  Special 
mention  may  be  made  of  the  Reports  of  the  Commissioner  of 
Navigation,  the  Superintendent  of  the  Coast  and  Geodetic 
Survey,  the  Lighthouse  Board,  the  Chief  of  the  Weather 
Bureau,  the  Commissioner  of  Fisheries,  and  the  Commissioner- 
General  of  Immigration.  The  reports  of  these  and  all  other 
bureaus  of  the  United  States  Government  are  printed  as  public 
documents,  and  may  be  obtained  without  cost  by  applying  to 
the  Senator  or  Congressman  representing  the  applicant's 
State  or  district. 


CIIAPTEPt    XYT 

AID    AND    REGULATION    BY    THE    STATE    AND    IMUNICIPAL 
GOVERNMENTS 

The  power  to  regulate  commerce  with  foreign  nations, 
and  among  the  States,  is  vested  in"  the  National  Govern- 
ment by  the  Constitution,  which  also  provides  that  "  no 
State  shall,  without  the  consent  of  the  Congress,  lay  any 
imposts  or  duties  on  imports  or  exports,  except  what  may 
be  absolutely  necessary  for  executing  its  inspection  laws," 
and  also  that  '"  no  State  shall,  without  the  consent  of  the 
Congress,  lay  any  duty  of  tonnage." 

These  clauses  seem  very  clear  and  definite;  but  a  long 
line  of  decisions  of  the  Supreme  Court  has  been  necessary 
to  define  the  limits  of  Federal  and  State  authority  over 
commerce.  At  the  time  of  the  adoption  of  the  Constitu- 
tion each  State  in  its  own  way  was  aiding  and  regulating 
commerce;  and  instead  of  immediately  ceasing  to  exer- 
cise authority  over  interstate  commerce,  the  States  have 
abandoned  commercial  regulation  gradually  as  the  Fed- 
eral Government  has  assumed  the  powers  it  possesses. 

Fortunately  for  the  development  of  the  United  States, 
the  powers  of  Congress  over  interstate  commerce  were 
broadly  interpreted  by  Chief  Justice  ]\rarshall  in  1824,  in 
the  celebrated  case  of  Gibbons  r.^.  Ogden  (9  Wheaton,  1), 
in  which  the  Supreme  Court  liold  that  a  vessel  enrolled  by 
the  Federal  Government  to  engage  in  coastwise  interstate 
commerce  could  not  be  required  to  obtain  a  State  license. 
It  was  held  that  the  United  States,  and  not  the  States, 
234 


STATE  AND  CITY  AID  AND  REGULATION  235 

could  determine  the  condition  under  which  interstate  com- 
merce may  be  carried  on.  Three  years  later,  in  Brown 
vs.  Maryland  (12  Wheaton,  419),  the  Supreme  Court  an- 
nulled a  law  of  Maryland  that  imposed  a  license  tax  of 
$50  on  importers  of  foreign  articles.  The  Court  argued 
that  this  was  a  tax,  that  it  regulated  international  com- 
merce, and  was  unconstitutional.  The  States  cannot 
compel  a  vessel  enrolled,  by  the  Federal  Government  to 
take  out  State  registration  papers.  A  law  passed  by  Ala- 
bama in  1854,  requiring  special  State  registration,  was 
held  by  the  Supreme  Court  in  1860  (Sinnot  vs.  Daven- 
port, 22  Howard,  227)  to  be  unconstitutional. 

A  State  may  lay  a  tax  on  the  property  value  of  the 
vessels  owned  by  its  citizens.  This  tax,  however,  must 
be  levied  on  the  property  of  the  ship,  and  not  upon 
its  enrolled  or  registered  tonnage.  In  1866  Alabama  im- 
posed a  tax  of  $1  per  ton  upon  all  vessels  operating  upon 
the  navigable  waters  within  the  State;  but  the  Supreme 
Court  in  1871  annulled  the  law  (Cox  vs.  The  Collector, 
12  Wallace,  204).  JSTor  can  a  State  authorize  a  board  of 
port  wardens  to  impose  fees  upon  ships  entering  its  ports. 
In  1867,  in  Steamship  Company  vs.  Port  Wardens  (6 
Wall,  31),  this  point  was  decided  hy  the  Supreme  Court. 
The  State,  furthermore,  is  without  authority  to  impose 
an  occupation  tax  upon  shipping.  Louisiana,  in  1870,  em- 
powered New  Orleans  to  levy  a  tax  upon  all  persons  pur- 
suing any  trade  or  profession,  and  the  city  placed  a  tax 
of  $500  on  persons  or  ('(^rporations  owning  and  I'umiing 
towboats  to  and  from  the  Gulf  of  Mexico.  A  man  by 
the  name  of  Cooper,  owning  two  steam  proiKdlers,  en- 
rolled at  New  Orleans  imdei-  the  hiws  of  the  United  States, 
refused  to  pay  the  tax,  and  he  was  sustained  by  the 
Supreme  Court  of  the  United  States  in  1884,  foi-  the 
reas<ui  that  the  State  could  not  require  a  tax  to  be  paid 
for  the  privilege  of  employing  vessels  in  a  nuinner  autlior- 
17 


236     OCEAN   AND  INLAND  WATER  TRANSPORTATION 

ized  by  the  license  of  the  United  States  (Moran  vs.  New 
Orleai'is,  112  U.  S.,  (>!)). 

These  references  to  the  more  important  decisions  in- 
terpreting the  powers  of  the  ^'ational  and  State  Govern- 
ments to  reguhite  interstate  and  foreign  commerce  show 
that  the  Federal  power  is  plenary;  that  vessels  enrolled  by 
the  United  States  for  the  coastwise  trade  cannot  be  bnr- 
dened  or  restricted  by  State  laws  regarding  registration, 
licenses,  fees,  or  tonnage  taxes.  The  State  may  tax  ships 
as  property  at  the  port  of  registration,  bnt  it  may  tax 
commerce  only  to  the  extent  that  "  may  be  necessary  for 
the  execntion  of  its  inspection  laws." 

The  power  to  regulate  inchides  the  power  to  aid,  and 
the  United  States  Government  has  pursued  a  liberal  policy 
in  its  harbor  improvements.  Before  1789  the  States 
carried  on  such  improvements  as  were  made  to  the  chan- 
nels and  harbor  areas  of  the  ports;  and  for  some  time 
after  1789  the  States  continued  to  execute  these  works, 
in  accordance  with  plans  approved  by  the  Xational  Gov- 
ernment. To  raise  the  funds  to  meet  the  expenses  of 
harbor  works,  the  State  was  permitted  by  Congress  to 
levy  tonnage  taxes.  For  instance.  Congress  passed  an  act 
in  1806  enabling  the  Board  of  Port  Wardens  for  the  port 
of  Phihidel})liia  to  impose  a  tax  of  four  cents  a  ton  on  all 
vessels  clearing  from  the  port,  the  receipts  of  the  tax  to 
be  used  in  improving  the  navigation  of  the  Delaware 
River  and  in  constructing  piers.  Congress  began  in  1822 
to  make  regular  a]ipropriations  for  harbors;  before  that 
time  Congress  did  little  more  than  to  maintain  the  light- 
houses. 

The  large  appropriations  by  Congress  for  the  improve- 
ment of  harbors  began  to  be  necessary  about  1870,  as  the 
result  of  the  use  of  vessels  of  deep  draft.  Since  then 
ships  have  steadily  increased  in  size,  the  volume  of  our 
nuiritime  trade   has  grown    rapidly,   the  number  of  our 


STATE  AND  CITY  AID  AND  REGULATION  237 

seaports  lias  become  larger,  and  the  expenditures  required 
to  modernize  and  maintain  our  harbors  have  risen  year 
by  year. 

In  1905  there  was  much  said  in  Congress  in  favor  of 
requiring  the  States  having  the  largest  ports  to  share  a 
part  of  the  expense  of  harbor  inqjrovements.  The  ap- 
propriation of  $500,000  made  by  Congress  that  year  for 
the  completion  of  the  30-foot  channel  in  the  Delaware 
Kiver  was  made  contingent  upon  an  appropriation  of 
$750,000  being  made  by  the  State  of  Pennsylvania. 
Half  the  $750,000  was  furnished  by  the  State  Govern- 
ment, and  the  other  half  by  the  city  of  Philadelphia. 
Whether  this  dual  plan  of  harbor  improvements  by  jSTa- 
tional  and  State  appropriations  will  become  a  permanent 
feature  of  our  policy  is  uncertain;  but  if  such  should  be 
the  outcome,  there  will  doubtless  be  a  desire  on  the  part 
of  the  States  to  be  given  authority  to  reimburse  them- 
selves by  levies  on  shipping  and  commerce.  It  is  not 
probable,  however,  that  State  taxes  on  commerce  will  find 
favor  with  the  American  people;  and  for  this  reason  the 
general  adoption  of  the  plan  of  dividing  the  expenses  of 
harbor  improvements  between  the  National  and  the  State 
Governments  is  hardly  to  be  expected. 

Control  over  pilots  and  j^ilotage  is  exercised  both  by 
the  States  and  the  Federal  Government.  The  regulation 
of  pilotage  by  the  States,  however,  is  by  permission  of 
Congress.  As  the  several  States  had  detailed  pilotage 
laws  in  1789,  Congress  confirmed  those  laws  by  provid- 
ing that  "  imtil  further  provision  is  made  by  Congress  all 
pilots  in  bays,  inlets,  rivers,  harbors,  and  ports  shall  con- 
tinue to  be  regulated  by  the  laws  of  the  States  wherein 
such  pilots  may  be,  or  with  such  laws  as  the  States  may  re- 
spectively enact  for  the  purpose." 

Congress  has  been  obliged  to  supplement  the  State 
pilotage  laws  to  prevent  interstate  friction.     A  vessel  en- 


2;iS     OCEAN  AND  INLAND   WATER  TRANSPORTATION 

tering  a  river  or  port  forming  the  Ijoimdary  between  two 
States  is  required  to  take  the  first  pilot  offering  his  serv- 
ices; the  pilots  of  one  State  may  not  be  preferred  over 
those  of  another.  Congress  has  also  ])r()hil)it(;(l  a  State 
from  discriminating  against  interstate  coMimerce  by  mak- 
ilig  the  pilotage  charges  less  for  a  vessel  when  its  trij)  is 
between  ports  of  the  State  than  when  it  is  sailing  between 
ports  in  different  States.  ■Olie  navigiiti(ni  laws  of  the 
United  States  recpiire  that  the  captain  and  mates  of  all 
steamers  enrolled  for  the  coastwise  service  shall  i|nalify 
as  pilots  and  be  licensed  by  the  United  States.  The 
States  are  prohibited  from  requiring  the  pilots  of  steam 
vessels  to  secure  a  State  license  in  addition  to  the  one 
granted  by  the  United  States.  A  coastwise  steamer  may 
enter  a  port  without  taking  a  pilot;  but  a  sailing  vessel 
cannot  do  so,  even  though  the  sailing  vessel  is  towed  into 
port  by  a  steam  tug  on  which  there  is  a  licensed  pilot. 
This  seems  an  unnecessary  discrimination  against  the 
sailing  vessel. 

The  control  over  pilots  and  pilotage  exercised  by  the 
States  may  be  illustrated  by  referring  to  Philadelphia 
and  l^ew  York  City.  As  Mr.  J.  B.  Byall  states:  ''  One 
of  the  duties  of  the  Board  of  Port  Wardens  (for  Phila- 
delphia) is  to  license  pilots  and  to  make  rules  for  their 
government.  There  are  eighty-four  pilots,  half  of  whom 
are  licensed  by  the  State  of  Pennsylvania  and  half  by 
the  State  of  Delaware.  They  serve  in  turn,  first-class 
pilots  taking  A^essels  wuth  draft  of  eighteen  feet  and  over, 
and  second-class  pilots  taking  vessels  of  less  than  eighteen 
feet.  The  rate  of  pilotage  is  fixed  by  law,  twelve  feet 
draft  and  less  being  $1.87  per  half  foot;  over  twelve  feet, 
$2.25  per  half  foot.  Pilotage  is  compulsory.  A  vessel 
entering  the  Delaware  River  must  lie  beyond  breakwater 
for  twenty-four  hours,  if  need  be,  waiting  for  a  pilot, 
who,  when  acce^ited,  must  be  paid  according  to  the  rate 


STATE  AND  CITY  AID  AND  REGULATION  239 

decided  upon  by  the  State  from  wliicli  the  pilot  shall 
come."  ^ 

The  laws  of  New  York  State  limit  the  number  of 
pilots  at  the  port  of  New  York  to  130.  Tliej  are  an 
incorporated  body.  The  members  of  the  corporation 
take  the  ships  in  turn,  the  earnings  are  pooled  and  each 
member  draws  $200  a  month  when  working  full  time. 
The  State  of  New  York  does  not  require  an  incoming 
vessel  to  take  a  pilot  unless  one  offers  his  services.  The 
New  York  rates  for  pilotage  are  $4.88  per  foot  for  ves- 
sels drawing  21  feet  or  more;  for  a  draft  from  6  feet  to 
14  feet  the  rate  is  $2.78  per  foot;  from  14  feet  to  18 
feet,  $3.38  per  foot;  and  from  18  feet  to  21  feet,  $4.13  per 
foot. 

In  the  enforcement  of  health  and  quarantine  regula- 
tions, also,  both-  the  State  and  Federal  Governments  par- 
ticipate. Each  has  the  power  of  taking  such  measures  as 
may  be  necessary  to  protect  the  health  of  its  citizens. 
Congress  has  power  to  subject  interstate  and  international 
travel  and  traffic  to  such  rules  and  restrictions  as  the  wel- 
fare of  the  country  may  require;  and  while  each  State  is 
giving  increasing  attention  to  the  prevention  of  diseases 
and  epidemics  within  its  borders,  the  tendency  is  to  look 
more  and  more  to  the  United  States  Public  Health  and 
Marine  Hospital  Service  to  regulate  commerce  to  prevent 
the  outbreak  and  spread  of  diseases.  The  National 
Government  can  adopt  measures  to  be  observed  in  all 
parts  of  the  United  States  and  in  our  insular  possessions. 
It  can  also  secure  the  co()peration  of  foreign  gDvernnients 
in  the  work  of  checking  disease. 

As  the  j)rotection  of  the  liealth  of  its  citizens  is  one 
of  the  police  powers  reserved  by  the  States,  the  National 

'  "The  American  System  of  Improving  and  Administering  Commer- 
cial Facilities."  Anyials  of  the  American  Academy,  November  1904, 
vol.  xxiv,  p.  494. 


240     OCEAxN   AND  INLAND   WATER  TRANSPORTATION 

(joverimient  has  Ix'cn  (obliged,  in  the  main,  to  work 
through  the  State  authorities  in  its  measures  regarding 
public  health.  There  is  no  question  as  to  the  power  of 
the  National  Government  to  place  quarantine  restrictions 
upon  interstate  and  foreign  commerce;  but  as  the  States 
also  have  that  power,  the  tendency,  especially  until  1893, 
was  for  the  National  Government  to  rely  upon  the 
States.  In  1878  Congress  provided  for  national  quaran- 
tine; and  in  1879,  in  consequence  of  the  epidemic  of 
yellow  fever  in  the  Southern  States  during  1878,  a  Na- 
tional Board  of  Health  was  created,  to  last  for  four  years. 
This  board  of  health  not  only  operated  through  the 
United  States  Marine  Hospital  Service  in  aiding  the  State 
and  local  health  officers,  but  also  established  numerous 
quarantine  stations,  and  these  temporary  stations  were, 
by  an  act  of  Congress  passed  in  1888,  made  permanent, 
and  were  equipped  for  their  purposes. 

The  next  step  in  the  development  of  the  national 
quarantine  service  was  taken  in  1893,  in  consequence  of 
the  danger  to  w'hich  the  people  of  the  United  States  were 
sulijected  by  the  appearance  of  the  Asiatic  cholera  in  the 
European  j)orts  from  which  large  numbers  of  immigrants 
were  brought  to  this  country.  This  law  provided  "  for 
the  formulation  of  uniform  regulations  to  be  observed  by 
all  State  and  local  quarantine  authorities  in  preventing 
the  introduction  of  epidemic  diseases  from  foreign  coun- 
tries, and  the  spread  of  such  diseases  from  one  State  or 
Territory  to  another."  If  the  States  or  municipalities  neg- 
lect or  refuse  to  carry  out  the  national  regulations,  the 
President  can  appoint  officers  to  execute  the  rules.  Since 
the  passage  of  the  Act  of  1893,  the  Surgeon-General  has 
supervised  the  State  and  local  quarantine  stations,  and  re- 
el uired  them  to  conform  to  the  standards  fixed  by  the 
Tnited  States.  Several  of  the  State  and  local  quaran- 
tines have  been  turned  over  to  the  Federal  Government, 


STATE  AND  CITY  AID  AXD  REGULATION  241 

Until  1902  the  title  of  ]\larine  Hospital  Service  was 
retained  without  change,  although  the  service  had  come  to 
include  all  quarantine  duties,  the  medical  inspection  of 
immigrants,  and  all  measures  taken  bv  the  United  States 
to  protect  the  public  health;  l)ut  in  1902  Congress  gave 
the  service  the  more  appropriate  title  by  Avhich  it  is  now 
known,  the  United  States  Public  Health  and  Marine  Hos- 
pital Service.  The  service  remains  under  the  Secretary 
of  the  Treasury,  where  it  has  always  been. 

A  reference  to  the  quarantine  service  at  ISTew  York 
City  will  illustrate  the  activity  of  a  typical  State  and  of 
the  United  States  at  a  port  of  first  rank.  The  Xew  York 
State  Commissioners  of  Quarantine  is  a  supervisory  body, 
and  under  this  board  is  a  Health  Officer's  Department. 
For  the  port  of  New  York  there  is  a  health  officer,  who  is 
the  active  and  responsible  official  for  the  enforcement  of 
the  State  quarantine  laws  and  the  regulations  of  the  State 
Commissioners  of  Quarantine  at  Xew  York. 

All  vessels  entering  the  port  of  iSTew  York  must  stop 
at  the  entrance  to  the  bay  opposite  the  quarantine  station 
on  Staten  Island.  One  or  more  of  the  State  health  offi- 
cers board  the  ship,  and  the  bill  of  health  from  the  port 
of  departure  must  be  shown  by  the  master  of  the  vessel, 
and  he  or  the  ship's  physician  must  report  all  sickness, 
accidents,  deaths,  and  births  that  have  occurred  on  the 
voyage.  If  the  vessel  has  come  from  an  infected  port, 
or  if  a  contagious  or  infectious  disease  is  found  to  exist 
among  the  passengers  or  crew,  the  ship  may  be  fumigated 
and  detained  until  the  health  officer  thinks  the  vessel  may 
discharge  its  passengers  and  cargo  without  endangering 
the  public  health. 

The  State  quarantine  charges  at  New  York  are  as  fol- 
lows: Each  vessel  from  a  foreign  port  must  pay  an  in- 
spection fee  of  $5;  and  if  the  inspection  is  made  after 
sundown,  an  additional  fee  of  $5  is  required.     A  charge 


242     OCEAN   AND   INr.ANI)   WATER  TRANSPORTATION 

of  $2  |ici'  liiiii<lrc(|  is  iiiiidc  i'(U-  tlic  cxiiiiiiiiatioii  of  stoor- 
jii^c  ])a.ss(']ii;'('i-.s;  mid  if  the  vessel  is  (lisiiifectcd,  tlic  charge 
is  from  $;")  to  $50.  Ordiiiiirily,  coastwise  vessels  are  ex- 
empt from  iiispeclioii,  Iml  from  ilie  (irst  of  May  1<>  tin- 
first  of  November  coastwise  vessels  from  ports  of  the 
United  States  south  of  Cape  Heiihypen  are  inspected  at 
the  New  York  Quarantine  Station,  and  a  fee  of  from  $1 
to  $3  is  charged  for  the  inspection. 

After  passing  the  State  quarantine  inspectors  at 
Staten  Island,  the  vessel  may  jn'oceed  to  liei-  pier;  l)ut 
if  she  has  steerage  passengers  al)oard,  they  must  l)c  landed 
at  the  United  States  Immigrant  Station  on  Ellis  Island, 
where  each  innnigrant  is  given  a  medical  inspection  by 
the  United  States  Public  Health  and  Marine  Hospital 
Service.  The  would-be  innnigrants  that  are  found  to 
have  a  disease  that  bars  them  from  entering  the  I'nited 
States  must  be  taken  back,  l)y  the  company  that  brought 
them,  to  the  port  from  which  they  came;  and  if  it  shall 
appear  that  the  alien  had  the  disease  when  he  stai'ted  on 
the  voyage,  and  that  the  disease  might  have  been  de- 
tected by  inspection,  the  steamship  company  is  liable  to 
a  fine  of  $100. 

By  an  act  of  Congress  passed  March  3,  1903,  every 
innnigrant  entering  this  country  who  is  not  a  citizen  of 
the  United  States,  Canada,  C^iba,  or  Mexico,  must  pay 
a  duty  of  $2  and  the  money  thus  collected  shall  constitute 
an  "  immigrant  fund  "  to  defray  the  expense  of  regulat- 
ing the  immigration  of  aliens  into  the  United  States. 

In  the  regulation  of  piers,  wharves,  docks,  elevators, 
and  other  facilities  for  handling  traffic,  the  States  have 
full  authority.  The  Federal  Clovernment  has  complete 
control  over  the  navigable  channel,  and  fixes  the  lines  be- 
yond which  shore  structures  may  not  extend  into  the 
channel;  but  between  the  j)ier  line  and  the  shore  the  State 
power  is  supreme.     The  dift'erent  methods  followed  by 


STATE  AND  CITY  AID  AND  REGULATION  243 

• 

the  States  in  the  management  or  regulation  of  the  trans- 
fer and  storage  terminal  facilities  were  briefly  considered 
in  Chapter  IV,  where  it  was  explained  that  two  States — • 
California  and  AVashington-^have  retained  the  ownership 
of  the  water  frontage,  and  have  established  State  harbor 
commissions  to  construct  and  administer  the  docks  and 
terminal  facilities.  Louisiana  has  given  the  city  of  New 
Orleans  the  ownership  of  the  riparian  rights  at  that  port; 
but  this  property  of  the  city  is  administered  and  improved 
by  a  board  of  commissioners  appointed  by  the  governor. 

The  more  general  tendency  in  the  past  in  the  United 
States  has  been  for  the  State  to  provide  for  the  regulation 
of  the  terminal  facilities  at  the  ports  by  the  city  govern- 
ment, and  to  allow  individuals  and  corporations  to  pur- 
chase land  along  the  water  front,  and  to  erect  piers  and 
wharves  upon  the  property  thus  acquired.  Such  has  been 
the  policy  of  Pennsylvania,  for  example,  in  regard  to 
the  port  of  Philadelphia,  wdiere  the  river  frontage,  as  was 
explained  in  Chapter  IV,  is,  with  the  exception  of  that 
at  the  ends  of  streets,  on  private  property.  The  owner- 
ship is  private,  but  the  use  may  be  public,  whenever  the 
needs  of  the  commerce  of  the  port  may  require  the  port 
authorities  to  assign  a  vessel  to  a  private  pier. 

In  New  York  the  theory  of  the  colony  and  the  State 
has  been  that  the  water  frontage  should  be  the  property 
of  the  city,  and  at  the  present  time  over  half  of  the  docks 
and  wharves  are  owned  by  the  city.  Unfortunately,  the 
city  has  in  the  past  disposed  of  a  part  of  tlie  frontage, 
and  will  be  compelled  to  pay  a  lai'ge  sum  of  money  to  re- 
possess itself  of  the  property  previously  turned  over  to 
private  control. 

Massachusetts  has  a  State  Board  of  Harbor  and  Land 
Commissioners,  to  which  is  intrusted  the  genei'al  care  and 
supervision  of  the  harbor  and  tidewater  within  tlie  com- 
monwealth.    The  powers  of  the  board  were  enlarged  in 


244     OCEAN  AND  INLAND  WATER  TRANSPORTATION 

1897,  and  since  then  llic  hoaivl  lias  acquired  the  owner- 
ship of  some  of  the  harhor  frontage  in  Boston,  and  has 
erected  one  large  pier  in  Sonth  T^oston. 

The  general  tendency  among  the  States  is  toward  the 
establishment  of  State  or  mnnicipal  harbor  hoards  with 
increased  powers.  The  tendency  is  also  in  the  direction 
of  the  limitation  of  private  ownershi|),  and  toward  the 
centi'alization  of  the  ])Owers  of  supervision  or  public 
ownershiji  in  a  public  board,  whose  meml)crs  are  in  some 
instances  State  officials,  and  in  other  cases  city  officers 
whose  powers  are  derived  from  the  States. 

The  municipal  government  exercises  police  super- 
vision over  the  port  under  its  jurisdiction,  and  in  the  case 
of  a  great  harbor  and  port  like  Xew  York  this  is  a  task 
of  some  magnitude.  In  1905  the  waters  of  Greater  Xew 
York  were  under  the  control  of  the  forty-second  police  pre- 
cinct, to  which  there  were  attached  a  steamer — the  Patrol 
- — four  steam  launches,  three  naphtha  launches,  and  seven 
i-owboats.  The  police  force  comprised  one  captain,  six 
sergeants,  twelve  roundsmen,  and  sixty  patrolmen.  The 
force  of  men  in  charge  of  the  steamer  Patrol  is  subject 
at  all  times  to  calls  to  assist  the  police  in  boarding  incom- 
ing vessels  when  necessary,  in  taking  off  prisoners,  in  at- 
tending and  aiding  at  fires  among  shipping  or  along  the 
river  front,  in  keeping  order  on  excursion  steamers,  and 
in  assisting  vessels  in  distress.  The  launches  and  row- 
boats,  with  their  crews,  are  assigned  to  posts  which  they 
patrol  during  their  hours  of  duty,  to  enforce  the  laws  and 
ordinances  of  the  city,  to  recover  drowned  bodies,  and 
prevent  stealing,  as  far  as  possible,  from  the  barges,  ves- 
sels, and  docks  within  the  harbor. 

The  taxation  of  property  invested  in  shipping,  and 
the  determination  or  regulation  of  the  charges  that  shall 
be  paid  for  the  use  of  docks  and  other  transfer  and  stor- 
age facilities,  are  powers  which  the  States  possess.     The 


STATE  AND  CITY  AID  AND  REGULATION  245 

policy  of  the  States  regarding  taxation  and  port  charges 
is  considered  in  the  following  chapter. 


REFERENCES  FOR  FURTHER  READING 

Byall,  J.  B.  "The  American  System  of  Improving  and  Achnin- 
istering  Commercial  Facilities."  Annals  of  the  American 
Academy  of  Political  and  Social  Science,  vol.  xxiv,  pp.  4S9- 
506,  November,  1904. 

Smith,  J.  R.  "The  Organization  of  Ocean  Commerce,"  Chapter 
XIII. 

"The  United  States  Public  Health  and  Marine  Hospital  Service." 
(This  is  a  pamphlet  of  forty-six  pages  comprising  "a  histori- 
cal sketch"  and  an  account  of  "the  service  as  it  is  to-day," 
reprinted  from  the  Journal  of  the  American  Medical  Associa- 
tion, Chicago,  1904.) 

"Report  of  the  State  Board  (of  Massachusetts)  on  Docks  and 
Terminal  FaciHties."  Boston,  1897.  (This  volume  gives  an 
account  of  the  control  of  docks  and  terminal  facihties  at  the 
large  ports  of  the  United  States  and  of  Europe.) 


CHAPTER    XVII 

PORT    AND    TERMIA^AL    CHARGES    AND    THE    TAXATION    OF 
SHIPPING 

A  VESSEL  entering  or  clearing  a  port  has  several 
charges  to  pay,  whether  the  port  is  administered  directly 
by  public  authority,  as  at  Hamburg,  Germany,  by  a  ''  pub- 
lic trust,"  as  at  Liverpool,  England,  or  jointl}'  by  a  public 
board  and  private  corporations  subject  to  Government 
regulation,  as  in  most  ports  of  the  United  States.  The 
charges  consist  in  part  of  tonnage  taxes  and  the  custom- 
house, quarantine,  port-warden,  and  consular  fees  im- 
posed by  the  Government,  and  in  part  of  the  pilotage, 
tonnage,  wharfage,  and  stevedore  expenses  of  a  strictly 
commercial  character.  In  addition  to  these  charges  there 
are  various  other  items  of  expense,  varying  with  the  char- 
acter of  the  vessel,  the  nature  of  the  cargo,  the  time  the 
ship  is  in  port,  and  the  navigation  laws  of  the  diiferent 
countries.  All  the  charges  necessarily  incurred  by  a  ves- 
sel in  entering  and  clearing  a  port,  and  in  discharging 
and  loading  its  cargo,  with  the  exception  of  the  wages 
of  stevedores,  may  be  and  usually  are  carefully  regulated 
by  public  authority.  In  the  United  States  this  power  of 
regulation  is  divided  between  the  Federal  and  State  gov- 
ernments. 

Some  tables  giving  the  charges  actually  paid  by  ves- 
sels at  representative  ports  of  the  United  States  will 
indicate  clearly  what  terminal  expenses  must  be  met  by 
the  ocean  carrier.  The  first  table  refers  to  a  tramp 
246 


TERMINAL  CHARGES  AND  TAXATION  OF  SHIPPING    247 

steamer  of  1,200  tons  net  register,  with  a  cargo  of  800 
tons  of  agricultural  implements,  and  states  the  expenses 
of  entering  the  port  of  Xew  York  and  discharging  its 
cargo.  This  table  does  not  give  the  cost  of  clearing  the 
port,  and  omits  various  expenses  that  arc  cited  in  the 
following  tables  •.! 

Pilotage,  draft  of  IS  feet,  at  $4.13  a  foot $74 .  .34 

Federal  tonnage  tax,  at  6  cents  per  ton  net  register 72 .  00 

Custom-honse  charges .5 .  50 

Health  officer's  fee .5 .  00 

Quarantine  inspection  charges .5 .  00 

Survey  of  hatch  (port  warden's  charge) 2 .  00 

Wharfage  (open,  unroofed  pier),  five  days 4.5.00 

Discharging  cargo,  40  cents  per  ton 320 .  00 

Tugs  for  towing  and  docking 20 .  00 

Total $548.84 

This  ship  could  have  entered  and  discharged  its  cargo 
at  Antwerp,  Belgium,  for  $443.62,  during  the  summer 
months,  and  for  $484.48  during  the  winter,  when  the 
pilotage  rates  are  higher.  The  charges  at  Rotterdam 
during  the  summer  would  have  been  $396.76;  at  Ham- 
burg, $600.11;  at  Havre,  $741.52;  and  at  Liverpool, 
$1,075.43.  The  high  costs  at  Liverpool  are  due  to  the 
expense  of  docking  the  ship,  and  to  the  higher  charges 
for  discharging  the  cargo. 

The  second  table  is  more  instructive,  because  it  gives 
the  cost  of  entering  and  clearing  the  port  of  Xew  York, 
and  includes  all  the  various  items  of  expense  actually  in- 
curred in  discharging  a  cargo  of  general  merchandise  and 
taking  on  another  general  cargo.  It  will  be  noticed  that 
the  ship  w^as  a  sailing  vessel,  and  had  to  be  towed  into 
and  out  of  port.  Its  costs  for  loading  and  unloading 
were  more  than  they  would  have  been  had  the  ship  been 

'  See  United  States  Daily  Consular  Reports,  April  21,  1904. 


248     OCEAN  AND  INLAND  WATER  TRANSPORTATION 

a  steamer.  The  licavv  wliarfage  charges  sliow  that  the 
ship  was  ill  port  for  some  time.  Tlie  long  trip  from  China 
necessitated  i^utting  the  sliip  in  the  dry  dock. 

ENTRANCE,  CLEARANCE,  AND  PORT  CHARGES  AT  THE  PORT 
OF  NEW  YORK  FOR  A  SAILING  VESSEL  OF  1,760  TONS 
NET  REGISTER,  WITH  3,570  TONS  GENERAL  CARCiO 
FROM  CHLXA,  AND  600  TONS  SHINGLE  BALLAST,  AND 
OUTWARD  WITH  3,421  TONS  GENERAL  CARGO  TO  AUS- 
TRALIA 1 

Custom-house  entry,  health  officer.  United  State.s  tonnage 

tax,  and  hospital  dues S127 .  54 

Note  of  protest 1 .00 

Port  warden 15 .  00 

Pilotage  inward 78 .  34 

Pilotage  outward 80. 10 

Towing  inward 40 .  00 

Towing  outward  and  in  harbor 110 .  00 

Wharfage 445 .  70 

Stevedore,  discharging 481 .95 

Stevedore,  loading 1,901 .  55 

Water 20.00 

Rating  chronometer 3 .  00 

Ballast  discharging,  350  tons .- 70.00 

Carpenter 217.01 

Coal,  wood,  and  lumber 105 .83 

Clerk,  delivering  cargo 76 . 50 

Watchman 85 .  25 

Cooperage 81 .  20 

Dry  dock 176.30 

Custom-house  clearance 2 .70 

Total $4,118.97 

The  wharfage  charges  alhnved  hy  the  Laws  of  the 
State  of  Xew  York  are  2  cents  per  day  per  register  ton 
up  to  200  tons,  and  f  cent  per  ton  in  excess  of  200  tons. 
For  vessels  occupying  an  outside  berth  the  rates  are  one 

*  This  table  is  taken  from  Urquhart, "  Dues  and  Charges  on  Shipping 
in  Foreign  Ports." 


TERMINAL  CHARGES  AND  TAXATION  OF  SHIPPING    240 

half.  Steamers  requiring  an  entire  pier  pay  from  $25  to 
$100  per  day.  The  minimum  port-warden  charge  is  $2; 
for  each  survey  made  the  fee  is  $2,  plus  $1  for  the  cer- 
tificate of  the  survey.  For  measuring  and  valuing  a  ves- 
sel the  port-warden's  fee  is  $10.  Although  there  are  no 
compulsory  hospital  dues  at  American  ports,  "  most  for- 
eign vessels  pay  dues  to  hospitals  at  rates  arranged  by 
their  consuls." 

The  following  tables  show  the  i)ort  charges  at  Phil- 
adelphia for  typical  sailing  vessels  and  steamers  carrying 
typical  bulk  cargoes.  The  tables  w^ere  compiled  by  Peter 
Wright  and  Sons,  of  Philadelphia,  and  the  facts  presented 
represent  actual  up-to-date   business  conditions: 

PORT  AND  TERMINAL  CHARGES  INCURRED  BY  A  SAILING 
VESSEL  INWARD  AT  PHILADELPHIA  IN  BALLAST,  AND 
OUTWARD  TO  JAPAN  WITH  75,800  CASES  OIL,  1,735 
TONS  NET  REGISTER,  1,801  TONS  GROSS  REGISTER 

Tonnage  tax,  1,735  tons,  at  6  cents $104. 10 

Entrance  surveys 5 .  50 

Health  fees 10.00 

Custom-house  brokerage 2 .  50 

Inward  pilotage.  Hi  feet,  at  $4  per  foot 46 . 00 

Towage  from  sea  to  Philadelphia 170 .  00 

Towboat  for  inward  docking 18 .  00 

Towage  in  harbor 88 .  00 

Discharging  588  tons  ballast,  at  28  cents  per  ton 164 .  64 

Wharfage,  loading,  13  days,  at  $9.25 120.25 

Lumber  and  wood 325 .  00 

Stevedore,  loading,  75,800  cases,  at  |  cent 663 .25 

Custom-house  clearance 2 .  70 

Custom-house  brokerage 2 .  50 

Consul  fees 29.90 

Attendance  fee 51 .  14 

Towage  to  stream 52 .  00 

Towage  to  sea 176 .00 

Pilotage  outward,  2U  feet,  at  $5.00 107 .  50 

Total $2,138.98 


250     OCEAN  AND  INLAND   WATEIi  TRANSPORTATION 


PORT  AND  TERMINAL  CHARGES  INCURRED  BY  A  SAILING 
VESSEL  INBOUND  FOR  PHILADELPHIA  FROM  JAVA, 
WITH  2,018  TONS  SUGAR,  1,422  TONS  NET  REGISTER,  1,611 
TONS  GROSS  REGISTER 

.Tonnage  tax,  1,422  tons,  at  G  cents $85 . 32 

Entrance  surveys .5 .  50 

Health  fee 10.00 

Noting  protest 1 .  50 

Custom-house  brokerage 2 .  50 

Inward  pilotage,  19^  feet,  at  $5 97 .50 

Towage  from  sea  to  dock 192 .  00 

Boatman  running  lines 3 .  00 

Survey  on  hatches  and  cargo 13 .00 

Copy  surveyor's  report 1 .  75 

Custom-house  permits,  certificate  of  weight,  etc 1 .  00 

Wharfage,  14  days,  at  $9.47  per  day 132 .  58 

Cooperage,  2,018  tons,  at  2  cents  per  ton 40.36 

Stevedore,  discharging,  2,018  tons,  at  28  cents 565 .  04 

Postage  and  petties 5 .  00 

Advertising  crew 5 .  00 

Attendance  fee 51 .  14 

Total $1,212 .  19 


PORT  AND  TERMINAL  CHARGES  INCURRED  BY  A  SAILING 
VESSEL  OUTBOUND  FROM  PHILADELPHIA,  LOADING 
2,210  TONS  COAL  FOR  CAPETOWN,  SOUTH  AFRICA,  1,422 
TONS  NET  REGISTER,  1,611  TONS  GROSS  REGISTER 

Towage  in  harbor $68 .  00 

Ballast  logs 75 .  00 

Trimming  2,210  tons,  at  7  cents 154.70 

In.spection  of  fittings  and  certificate  of  lading 10.00 

Postage  and  petties 5 .  00 

Custom-house  clearance 2.90 

Custom-house  brokerage 2 .  50 

Consul  fees 18.00 

Attendance  fee 51 .  14 

Towage  to  sea 206.00 

Outward  pilotage,  20  feet,  at$5 100.00 

Total $693. 24 


TERMINAL  CHARGES  AND  TAXATION  OF  SHIPPING   251 


PORT  AND  TERMINAL  CHARGES  INCURRED  BY  A  STEAMER 
OUTBOUND  FROM  PHILADELPHIA  FOR  JAPAN,  WITH 
166,594  CASES  REFINED  PETROLEUM,  2,768  TONS  NET 
REGISTER,  4,232  TONS  GROSS  REGISTER 

Boatman  running  lines $6 .  00 

Towage  in  harbor 90 .  00 

Electric  lights 47 .90 

Wharfage,  15  days,  at  $13.50  per  day 202 .  50 

Lumber  and  wood 590 .  00 

Stevedore,  loading,  166,594  cases,  at  |  cent 1,249.46 

Winchmen,  296  hours,  at  35  cents 103.60 

Custom-house  clearance 2 .  70 

Custom-house  brokerage 2.50 

Consul  fees 20.00 

Attendance  fee 51.14 

Towage  to  ocean 90 .  00 

Outward  pilotage,  25^  feet,  at  $5 127 .  50 

Total $2,583.30 


PORT  AND  TERMINAL  CHARGES  INCURRED  BY  A  STEAMER 
INBOUND  AT  PHILADELPHIA  FROM  JAVA.  WITH  7,962 
TONS  SUGAR,  AND  OUTWARD  IN  BALLAST,  3,923  TONS 
NET   REGISTER,   6,057   TONS   GROSS  REGISTER 

Tonnage  tax,  3,923  tons,  at  6  cents $235 .  38 

Entrance  surveys 5 .  50 

Health  fees 10.00 

Noting  protest 1 .  50 

Custom-house  brokerage 2 .  50 

Inward  pilotage,  26  feet,  at  $5 130.00 

Tug  boats  for  inward  docking 30 .  00 

Boatman  rimning  lines 6 .  00 

Survey  on  hatches  and  cargo 13 .00 

Copy  surveyor's  report 1 .  75 

Custom-house  permit,  certificate  of  weights,  etc 1 .00 

Wharfage,  10  days,  at  $31.92 319 .20 

Cooperage,  7,962  tons,  at  2  cents 159.24 

Stevedore,  discharging,  7,962  tons,  at  28  cents 2,229.36 

Tally  clerks,  11^  days,  at  $3 34.50 

Custom-house  clearance 2.95 

Custom-house  brokerage 2 .  50 

Consul  fees 4 .  25 

Attendance  fee 51 .  14 

Towage  to  stream 30 .  00 

Outward  pilotage,  RU  feet,  at  $5 82.50 

Total $3,352.27 

18 


252     OCEAN  AND  INLAND  WATER  TRANSPORTATION 

The  tables  refer,  among  other  items,  to  the  United 
States  tonnage  taxes  on  ships.  Vessels  engaged  in  the 
coastwise  commerce  of  the  Ignited  States  are  exempt  from 
tonnage  taxes;  but  according  to  the  Act  of  1884,  as 
amended  in  188f!  and  now  in  force,  a  tonnage  duty  of 
•3  cents  per  ton  net  register,  not  to  exceed  15  cents 
per  ton  in  any  one  year,  is  imposed  on  each  vessel  enter- 
ing ''  any  port  of  the  United  States  from  any  foreign 
port  or  place  in  N^orth  America,  Central  America,  the 
West  India  Islands,  the  Bahama  Islands,  or  the  coast  of 
South  America  bordering  on  the  Caribbean  Sea."  Ves- 
sels entering  from  all  other  foreign  ports  pay  6  cents 
per  ton  at  each  entry,  but  not  more  than  30  cents  per 
ton  per  annum.  The  law  also  provides  that  "  the  Pres- 
ident of  the  United  States  shall  suspend  the  collection 
of  so  much  of  the  duty  herein  imposed,  on  vessels  entered 
from  any  foreign  port,  as  may  be  in  excess  of  the  tonnage 
and  lighthouse  dues,  or  other  equivalent  tax  or  taxes, 
imposed  in  said  port  on  American  vessels  by  the  Gov- 
ernment of  the  foreign  country  in  which  such  port  is 
situated." 

In  accordance  with  the  provision  just  quoted  from 
the  law,  the  President  has  at  different  dates  since  1884 
issued  proclamations  exempting  from  tonnage  taxes  ves- 
sels from  Colon  and  Panama;  Monserrat  Island  in  the 
West  Indies;  Greytown  and  Bocas  del  Toro  in  Nic- 
aragua; Ontario,  the  Kingdom  of  the  Netherlands  and 
the  Dutch  East  Indies,  Guadeloupe,  Grenada,  and  Copen- 
hagen. For  a  time  vessels  from  Germany  were  ex- 
empted from  the  tax,  but  the  favor  was  withdra^vn  be- 
cause of  the  charges  imposed  at  German  ports. 

The  tonnage  taxes  collected  now  amount  annually  to 
between  $800,000  and  $900,000.  By  the  Act  of  1884, 
this  income  is  devoted  to  the  maintenance  of  the  Marine 
Hospital  Service. 


TERMINAL  CHARGES  AND  TAXATION  OF  SHIPPING    253 

The  reciprocity  feature  of  the  existing  Federal  ton- 
nage tax  law  is  evidence  of  the  liberal  international  policy 
of  the  United  States;  but  the  American  merchant  marine 
has  received  Init  little  benefit  from  the  provision  for  re- 
ciprocal exemption  of  tonnage  duties.  Fortunately  for 
our  revenues,  Gi'cat  Britain,  (Jermany,  and  the  leading 
maritime  countries,  other  than  the  Xetherlands,  have  not 
aljolished  their  tonnage  taxes,  light  dues,  and  other 
charges,  and'  qualified  themselves  for  exemption  from  our 
tonnage  charges. 

The  United  States  Commissioner  of  iS^avigation  has 
for  many  years  advocated  the  repeal  of  the  reciprocity 
provisions  of  the  Act  of  1886.  He  says  in  his  report  for 
1904:  "If  its  purpose  were  to  induce  other  nations  to 
repeal  corresponding  taxes  on  shipping,  it  has  failed,  for, 
though  in  force  nearly  twenty  years,  its  effects  on  foreign 
legislation  have  been  inconsiderable.  As  a  rule,  the  rev- 
enue requirements  of  foreign  nations  have  not  permitted 
the  reduction  or  abolition  of  the  taxes  so  readily  collected 
and  equitably  distributed  as  are  taxes  on  net  tonnage  at 
entry.  If  its  purpose  were  to  secure  for  American  vessels 
special  exemptions  in  foreign  ports,  it  has  been  equally 
a  failure,  for  the  foreign  ports  at  which  no  taxes  cor- 
responding to  our  tonnage  taxes  are  levied,  with  some 
exceptions,  are  seldom  visited  by  American  vessels." 

The  Federal  Government  taxes  the  use  or  operation 
of  sliips  engaged  in  international  commerce  by  levying 
tonnage  duties;  the  States,  or  such  of  them  as  choose  to 
do  so,  may  tax  the  ownership  of  vessels.  Although  the 
Supreme  Court  has  been  careful  to  deny  to  the  States 
the  power  of  levying  any  tonnage  taxes  and  license  fees 
on  interstate  and  foreign  commerce,  the  Court  has  at 
various  times,  from  Gibbons  r.s.  Ogden,  in  1824,  to  the 
])resent  time,  upheld  the  State  in  taxing  the  property 
which  its  citizens  may  have  in  ships.      The  language  of 


254     OCEAN   AND   IXLAXI)    WATER  THANSI'ORTATION 

the  Court,  ill  1884,  in  Moi-aii  r.s.  New  Orleans  (112  U. 
S.,  GO),  was  that  "  vessels  engaged  in  foreign  and  inter- 
state commerce,  and  duly  enrolled  and  licensed  under  the 
acts  of  Congress,  may  be  taxed  by  State  authority  as 
property,  provided  the  tax  be  not  a  tonnage  duty,  is  levied 
only  at  the  port  of  registry,  and  is  valued  as  r»ther  prop- 
erty in  the  State,  without  unfavorable  disc'i-iiiiiiiatiDU  on 
account  of  its  employment." 

The  practice  of  the  States  generally  has  been  to  tax 
pro})erty  in  shipping.  During  the  jxiiod  of  <>ur  pros- 
perity as  a  maritime  country  these  taxes  were  not  sj)ecially 
burdensome;  but  with  the  decline  of  our  merchant  marine 
in  the  foreign  trade  in  competition  with  our  more  suc- 
cessful foreign  rivals,  the  State  taxes  became  an  appreci- 
able handicap  upon  the  growth  of  our  shipping.  The 
desirability  of  relieving  American  shi})piug  engaged  in 
foreign  commerce  from  State  taxes  was  early  recognized 
by  New  York,  which  in  1881  exempted  vessels  registered 
in  the  ports  of  that  State  and  engaged  in  foreign  com- 
merce from  all  taxation  for  State  and  local  purposes; 
and  also  exempted  corporations,  all  of  whose  vessels  were 
employed  in  foreign  commerce,  from  taxes  upon  their 
capital  stock,  franchises,  and  earnings.  The  law  as  first 
enacted  was  to  be  valid  for  fifteen  years,  but  in  1892  it 
was  made  effective  for  thirty  years,  i.  e.,  until  1922. 
Pennsylvania  and  Alabama  also  impose  no  taxes  on 
American  ships  engaged  in  the  foreign  trade,  and  Dela- 
ware lays  no  tax  on  any  vessels.  Xone  of  the  other 
States  has  gone  so  far  as  these  four  have  in  freeing  ship- 
ping from  tax  burdens,  but  several  States  impose  lighter 
taxes  on  vessels  engaged  in  foreign  trade  than  are  levied 
on  coastwise  shipping,  and  several  States  have  lowered 
their  shipping  taxes  during  the  past  decade. 

The  laws  of  the  States  in  regard  to  the  taxation  of 
shipping,  as  is  true  of  legislation  upon  numerous  other 


TERMINAL  CHARGES  AND  TAXATION   OF  SHIPPING   255 

subjects,  are  not  uniform;  and  the  taxes  imposed  hx  some 
States  are  in  part  evaded  through  the  possibility  of  en- 
rolHng  vessels  outside  of  the  State  where  they  are  mainly 
owned,  and  in  the  ports  of  a  State  where  there  are  no 
taxes  on  sliipping,  or  where  the  taxes  are  lower. 

If  the  States  are  to  continue  to  tax  property  in  ship- 
ping, the  taxes  ought,  for  two  reasons  at  least,  to  be 
made  lighter  than  on  other  forms  of  property : 

(1)  A  prosperous  develoi)ment  of  our  merchant  marine 
is  especially  to  be  desired.  The  American  tonnage  engaged 
in  the  foreign  trade  has  such  difficulty  in  competing  with 
the  vessels  of  other  countries  that  there  ought  to  be  no 
handicap  in  the  form  of  State  taxes.  The  coastwise  ship- 
])ing  is  protected  from  foreign  competition,  but  the 
jirogress  of  our  maritime  coastwise  commerce  has  been 
only  moderate.  It  would  l)e  for  the  l)est  interests  of  the 
United  States,  industrially  and  commercially,  to  relieve 
our  coastwise  slii})ping  of  the  burdens  of  State  taxation. 

(2)  Another  reason  why  a  vessel  should  pay  only  a 
light  State  tax  is  that  the  ship  spends  but  a  small  ])art 
of  the  time  at  its  home  port.  Taxes  are,  at  least  in  |)art, 
in  the  nature  of  fees  which  the  State  exacts  fnnii  prop- 
erty in  return  for  the  services  or  benefits  derived  from 
the  State.  There  are  manifest  reasons  why  ])roperty  in 
a  dwelling  or  an  office  block  should  pay  a  higher  tax 
than  should  be  levied  upon  property  in  a  ship. 

The  abolition  by  the  States  of  all  taxes  on  shipping- 
has  much  to  commend  it.  "  It  is  a  mistake,"  says  the 
Commissioner  of  jSTavigation  in  his  report  for  1895,  "  for 
the  States  in  their  relation  to  the  Union  to  impose  such 
taxes,  for  they  place  American  vessels  at  a  disadvantage 
in  competition  with  the  vessels  of  our  sagacicnis  and  un- 
tiring foreign  rivals.  It  is  a  mistake  for  the  States  in 
their  relations  to  one  another,  for  such  taxes  defeat  their 
own  ostensible  ends  by  driving  sliipj)ing  from  an  exact- 


25G     OCEAN   AND   INLAND   WATER  TRANSPORTATION 

ing  home  jKjrt  to  a  port  in  another  State  more  farsiglited 
and  liberal  in  its  tax  policy.  These  taxes  are  imfair, 
for,  from  the  nature  of  the  vessel,  it  can  enjoy  only  to 
a  slight  extent  the  benefits  of  those  public  undertakings 
to  which,  in  the  main,  the  jjroceeds  of  State  and  local 
taxes  are  devoted." 


REFEEENCES  FOR  FFRTUKR  READIXO 

Urquhart,  C.  D.  "Dues  and  Charges  on  Shij^piiig;  in  Foreign 
Ports."  Eleventh  edition,  revised  and  enlarged  by  John 
Green,  1903.  (Published  by  Cleorge  Philip  &  Son,  32  Fleet 
Street,  London.) 

Jones,  Evan  Rowland,  Editor.  "The  Shipping  World  Year- 
book." (This  desk  manual  is  published  annually  by  the 
Shipping  World,  Arundel  Street,  Strand,  London,  England.) 

Chamberlain,  E.  T.,  United  States  Commissioner  of  Navigation. 
"Navigation  Laws  of  the  United  States,"  1903.  "Report 
of  the  Commissioner  of  Navigation,"  1894  and  subsequent 
years.  (The  reports  for  1894  and  1895  discuss  in  detail  the 
State  taxation  of  shipping.) 


CHAPTER    XYITI 

THE    MERCANTILE    MARINE   roLK'Y    OF   THE    UNITKI)   STATES 

The  iiiaritiiiie  policy  of  our  country  has  been  broad, 
and  in  many  respects  liberal;  l)ut  the  resuUs  have  been 
disappointing.  The  decline  of  our  tonnage  engaged  in 
the  international  carrying  trade  during  the  i)ast  forty-five 
years  has  been  so  rapid  and  so  continuous  as  to  indicate 
that  our  policy  toward  shipping  and  navigation  cannot 
have  been  altogether  wise. 

The  American  people  feel  keenly  the  chagrin  of  their 
defeat  in  the  competition  for  the  ocean-carrying  trade; 
and  however  much  consolation  they  may  derive  from  the 
thought  that  the  capital  of  the  country  has  been  profitably 
spent  in  building  railroads  and  developing  the  vast  nat- 
ural resources  of  their  broad  territory,  they  nevertheless 
desire,  if  possible,  to  regain  the  maritime  prestige  they 
held  during  the  first  half  of  the  nineteenth  century.  All 
sections  and  parties  in  the  United  States  are  agreed  in 
wishing  for  success  on  the  seas,  but  there  is  much  differ- 
ence of  opinion  as  to  the  means  by  which  success  may  be 
won. 

The  United  States  Government  has  fostered  the  ship- 
building industry  in  four  ways: 

(1)  Congress  has  always  restricted  American  registry 
to  "  vessels  built  within  the  United  States,"  the  only  ex- 
ception to  this  being  (a)  "  vessels  which  may  be  captured 
in  war  by  citizens  of  the  United  States,  and  lawfully  con- 
demned as  a  prize,  or  which  may  be  adjudged  to  be  for- 

257 


258     OCEAN   AND  INLAND  WATER  TRANSPORTATION 

feited  for  a  breach  of  tho  laws  of  the  Tlnited  States,  being 
wholly  owned  hy  citizens"  ;  and  (h)  forcign-bnilt  vessels 
wrecked  in  the  United  States,  and  purchased  and  repaired 
hv  Aniei'ican  citizens,  j»rovi(h'd  "the  repairs  put  upon 
such  vessel  are  equal  to  three  fourths  of  the  cost  of  the 
Vessel  when  so  repaired," 

(2)  Our  coastwise  and  domestic  commerce  is  open 
only  to  American  vessels.  This  policy  has  been  in  force 
since  1817,  when  the  law,  still  in  force,  was  passed  de- 
barring foreign  vessels  from  our  domestic  trade  and  fish- 
eries. Indeed,  from  1789  to  1817  foreign  ships  seldom 
engaged  in  our  coastwise  business,  because  the  American 
ships  could  usually  perform  the  service  better  and 
cheaper  than  could  their  foreign  rivals.  ISTo  other  law 
has  done  so  much  for  the  American  shipbuilding  industry 
and  for  our  merchant  marine,  during  the  past  fifty  years, 
as  has  this  Act  of  1817.  In  1904,  nearly  six  sevenths 
of  the  total  tonnage  of  our  merchant  marine  was  engaged 
in  the  coasting  trade  and  sea  fisheries;  and  while  the 
tonnage  of  our  over-sea  marine  has  declined,  the  tonnage 
of  our  domestic  fleet  has  steadily  risen.  The  growth  in 
our  domestic  fleet  has  been  most  rapid  on  the  Great 
Lakes,  and  slowest  upon  our  other  inland  waterways. 
The  progress  of  our  maritime  coastwise  fleet  has  been 
moderately  rapid;  but  if  the  coastwise  commerce  of  the 
United  States  had  been  open  to  foreign  ships  during  the 
past  fifty  years,  they  would  probably  be  carrying  most 
of  our  domestic  maritime  traffic  at  the  present  time. 

(3)  Congress  gives  shipbuilders  the  advantage  of  al- 
lowing them  to  import  free  of  duty  such  foreign  materials 
as  they  may  desire  to  use  in  constructing  or  repairing 
vessels  to  be  sold  to  foreigners,  or  to  be  sold  to  citizens 
of  the  United  States  to  be  "  employed  in  the  foreign 
trade,  including  the  trade  between  the  Atlantic  and  Pa- 
cific ports  of  the  United  States."     The  articles  exempted 


MERCANTILE  MARINE  POLICY   OF  UNITED  STATES      259 

from  duty  include  all  such  materials  as  may  be  used  in 
building  the  machinery  of  the  vessels  or  in  fitting  out  and 
equipping  the  ships.  The  value  of  these  ex('m])tions  from 
duty  is,  however,  greatly  lessened  by  the  provision  of  the 
law  stipulating  that  the  vessels  receiving  these  benefits 
"  shall  not  be  allowed  to  engage  in  the  coastwise  trade  of 
the  United  States  more  than  two  months  in  any  one  year." 
Of  course,  no  vessel  owned  by  foreigners  can  engage  in 
our  coasting  trade  at  any  time;  our  commerce  with  Ha- 
waii, Alaska,  and  Porto  Ivico  is  now  a  part  of  our  coasting 
trade,  and  on  July  1,  1006,  our  trade  with  the  Philippines 
will  be  so  considered,  unless,  as  is  probable,  the  closing 
of  our  trade  with  the  Philippines  to  foreign  ships  shall 
be  postponed  until  1909,  as  has  been  recommended  by 
the  Secretary  of  War. 

American  shipbuilders  have  not  built  merchant  ships 
for  foreign  sale  during  recent  years,  nor  have  they  con- 
structed many  vessels  to  be  employed  by  Americans  in 
our  foreign  trade,  consequently  only  small  amounts  of 
foreign  materials  have  been  impoi-ted  for  ship  construc- 
tion. E^or  is  it  probable  that  much  use  will  be  made  of 
the  privilege  of  free  imports  in  the  future,  because  as 
the  report  of  the  Merchant  Marine  Commission  of  1905 
stated,  "  no  American  shipowner  under  present  conditions 
builds  a  deep-sea  ship,  even  though  she  be  designed  pri- 
marily for  foreign  commerce,  without  considering  that 
he  may  be  glad  some  day  to  fall  back  on  the  coastwise 
trade,  now  extended  to  Hawaii,  Porto  Rico,  and  soon  to 
include  the  Philippines."  This  report  further  states  that 
in  the  complete  construction  of  only  one  large  steel  ship, 
the  Dii'igo,  built  by  Arthur  Sewall  and  Company  at  Bath, 
Maine,  has  the  privilege  of  free  foreign  materials  been 
accepted,  and  the  results  in  this  instance  have  not  proven 
satisfactory,  although  the  Dirigo  is  operated  on  the  Pa- 
cific, between  Pucet  Sound  and  Hawaii. 


260     OCIvW   AND  INLAND  WATER  TRANSPOltTATIUN 

(4)  The  naval  policy  of  the  United  States  during  the 
past  twenty  years  has  been  of  great  assistance  to  the 
shipyards  located  on  our  seaboard.  The  orders  from  the 
(loNcniiiiciif  lor  wai'  \c>scls  have  enabled  oiir  shipbuilders 
to  modernize  their  phmls,  and  have  encouraged  them  in 
starting  new  yards,  such  as  those  at  New))ort  A'ews,  ('am- 
den,  and  Fore  Ki\cr.  The  r(dati\ely  large  naval  tonnage 
constructed  by  the  Tnited  States  has  been  carefully  dis- 
tributed among  the  shijiyards  on  our  Atlantic  and  PaciHc 
coasts;  the  Government  woi-k  has  recpiired  the  steady  em- 
ployment of  many  thousand  men,  and  has  developed  a 
large  body  of  skilled  mechanics  and  a  corps  of  naval  archi- 
tects. 

The  American  shii)l)uilder  is  unable  to  compete  "with 
foreign  yards  in  the  construction  of  ships  for  sale  in  the 
world's  market  for  vessels,  and  the  tonnage  under  our 
flag  engaged  in  foreign  trade  has  remained  stationary  for 
some  years  at  the  low  level  of  800,000  to  900,000  tons, 
consequently  the  market  for  American-built  merchant 
ships  fluctuates  with  the  changes  in  industrial  and  com- 
mercial conditions  of  a  single  country,  the  Ignited  States. 
During  the  years  1900  to  190:^  inclusive,  American  ship- 
yards were  busy;  then  followed  a  period  of  depression. 
In  1905  shipbuilding  on  the  Great  Lakes  was  active,  and 
will  be  so  during  190G;  but  in  190-1  and  1905  the  sea- 
board yards  were  obliged  to  restrict  their  work  to  only 
a  half  or  a  third  of  their  capacity. 

The  fluctuating  character  of  the  American  shipbuild- 
ing industry  would  have  l)een  fatal  without  the  great  as- 
sistance the  shipyards  have  received  from  the  steady  and 
profitable  business  of  constructing  naval  vessels.  Indeed, 
the  naval  programme  has  kept  some  of  our  large  ship- 
yards from  becoming  bankrupt  and  going  out  of  existence 
during  the  past  ten  years. 

The  policy  of  the  United  States  toward  ocean  navi- 


MERCANTILE  MARINE  POLICY  OF  UNITED  STATES       2G1 

gation— toward  the  ownersliip  and  operation  of  vessels — 
mav  be  briefly  summarized  as  follows: 

(a)  Our  tonnage  taxes  are  light  and  the  laws  fa\'or 
American  ships  in  two  ways:  Vessels  engaged  in  our 
coastwise  and  inland  domestic  commerce  and  in  our  fish- 
cries  are  exempt  from  all  tonnage  taxes,  and  by  this  pro- 
vision of  our  law  six  sevenths  of  our  shipping  is  relieved 
from  tonnage  dues.  Again,  American  ships  are  favored 
i)y  the  lower  tonnage  taxes  of  three  cents  per  ton  per  entry 
and  fifteen  cents  per  ton  per  annum  im]iosed  on  vessels 
])]ying  between  the  ports  of  the  United  States  and  the 
])orts  of  other  iSTorth  American  countries,  the  West  In- 
dies, and  the  Caribbean  coast  of  South  Vmerica.  Al- 
though this  lower  tonnage  tax  on  the  ships  engaged  in 
our  near-by  foreign  trade  applies  to  foreign  as  well  as 
American  vessels,  the  fact  that  American  vessels  are  used 
more  for  that  part  of  our  foreign  trade  than  they  are 
for  our  trade  with  more  remote  countries  makes  the  half 
rate  of  tonnage  taxes  for  the  near-by  foreign  trade  an 
advantage  to  American  shipping. 

(b)  The  Federal  Government  improves,  maintains, 
lights,  and  buoys  the  harbors  and  channels  of  our  ports 
without  any  cost  xo  shipping,  and,  with  few  exceptions, 
without  expense  to  the  cities  and  States  within  which  the 
ports  are  located.  The  only  charge  imposed  by  the 
United  States  upon  shipping  that  might  be  considered  a 
tax  levied  to  cover  the  costs  of  harbor  and  channel  im- 
ju'ovements  are  the  tonnage  taxes  levied  upon  vessels  en- 
tering our  ports  from  foreign  countries,  and  since  1884 
the  receipts  from  the  tonnage  dues  have  been  devoted  to 
the  maintenance  of  the  Marine  Hospital  Service.  Our 
tonnage  tax  rates  are  low,  and  they  yield  only  one  third 
the  amount  of  the  corresponding  taxes — '"  the  light 
dues  " — imposed  by  Great  Britain.  At  Bremen,  Ham- 
burg, and  other  Continental  ports,  the  tonnage  taxes,  or 


2G2     OCEAN   AND  INLAND  WATER  TRANSPORTATION 

liglit  (liics,  are  higlier  tlinii  the  British  charges,  and  thus 
nnic'h  higher  than  the  American.  Congress  maintains 
our  lighthouse  estahlishment  at  an  annual  expense  of 
ahout  $5,000,000,  hy  a])propriations  from  the  general 
treasury;  whereas  the  "  light  dues  "  collected  by  the 
•  TTnited  Kingdom  aiiKMiiit  to  $250,000  a  year  more  than 
she  expends  upon  her  lighthouse  estahlishment.  It  should 
be  noted,  however,  that  our  low  tonnage  taxes  apply  to  all 
vessels,  foreign  and  American,  engaged  in  trade  between 
the  United  States  and  foreign  ports,  and  that  the  larger 
share  of  our  foreign  trade  is  carried  in  shi])s  Hying  foreign 
flags.  Although  our  tonnage  taxes,  as  was  explained 
above,  are  so  arranged  as  to  favor  American  shipping,  the 
fact  that  foreign  ships  pa}-  nearly  eleven  out  of  each  twelve 
dollars  of  the  tonnage  dnes  we  now  collect,  shows  that 
they  derive  more  benefit  absolutely  from  our  low  tonnage 
charges  than  ships  under  the  American  flag  do. 

(c)  The  United  States,  like  other  comitries,  favors  the 
shipping  under  its  own  flag  in  its  payments  for  carrying 
the  mails.  The  contract  service  is  restricted  to  American 
vessels,  and  the  payments  for  carrying  the  mails  are 
larger  than  the  United  States  Post-Office  Department 
would  be  obliged  to  make  to  foreign  shipowners  for  per- 
forming the  services  covered  by  the  contracts.  These 
contracts  for  carrying  the  mails  impose  upon  the  contrac- 
tors various  other  obligations  than  that  of  carrying  the 
mails,  and  the  payments  made  by  the  United  States  are 
intended  to  promote  our  mercantile  marine  and  our  naval 
strength. 

The  laws  of  the  United  States  for  the  protection  of 
American  seamen  have  been  a  credit  to  our  country.  It 
has  been  the  theory  of  our  Government  that  the  con- 
ditions of  living  on  board  American  ships  ought  to  be 
su]ierior  to  those  on  foreign  vessels,  just  as  the  standard 
of  living  among  American  laborers  is  hisher  than  among 


MERCANTILE  MARINE   POLICY  OF   UNITED  STATES       263 

foreign  workingiiien.  The  first  act  passed  by  Congress 
in  the  interest  of  our  seamen  was  enacted  in  1790.  It 
embodied  the  best  usages  of  that  time,  and  subsequent 
legislation  regarding  seamen  has  developed  and  enlarged 
the  provision  of  our  first  law. 

The  legislation  of  every  maritime  country  concerning 
its  seamen  is  detailed,  and  regulates  the  manner  of  eni- 
])li)ying  and  discharging  the  men,  requires  the  shipmaster 
to  give  his  crew  adequate  food,  and  to  provide  each  man 
with  sanitary  quarters.  The  law  gives  the  captain  power 
to  compel  the  members  of  the  crew  to  live  up  to  their 
contracts,  and  protects  the  men  against  being  discharged 
in  a  foreign  port.  In  the  requirements  concerning  ra- 
tions and  air  space,  the  laws  of  the  United  States  are  more 
exacting  than  are  the  laws  of  other  countries.  It  costs 
more  to  feed  and  quarter  the  crews  on  American  vessels 
than  on  foreign  ships. 

Wages  are  fixed  by  contract  between  the  master  and 
the  seamen,  but  the  wages  on  American  vessels  average 
higher  than  on  other  ships.  Although  half  the  men  eni- 
})l<)yed  on  American  vessels  are  aliens,  more  than  half 
are  shipped  in  American  ports,  where  wages  average 
higher  than  they  do  in  foreign  countries.  The  officers 
of  our  vessels  are  American  citizens,  and  their  salaries 
are  higher  than  those  of  officers  of  foreign  ships. 

The  facts  upon  which  these  statements  regarding 
wages  rest  have  been  presented  in  much  detail  in  the 
annual  reports  of  the  United  States  Commissioner  of  Nav- 
igation. The  Merchant  ]\Iarine  Commission,  Avhich  nuidc 
its  investigation  in  1904,  heard  representatives  of  the  sea- 
nuni  at  sessions  held  by  the  commission  in  our  Atlantic, 
Gulf,  and  Pacific  ports,  and,  "  as  a  rule,  this  evidence  is 
to  the  effect  that  general  conditions  of  life  in  the  Ameri- 
can merchant  marine — wages,  food,  quarters,  etc. — are 
superior  to  those  in  foreign  countries." 


204     OCEAN   AND   INLAND   WATER  TRANSPORTATION 

The  causes  of  the  higher  wages  on  our  ships  are 
somewhat  complex.  In  so  far  as  the  officers  and  seamen 
are  Americans,  the  wages  are  influenced  by  the  economic 
and  social  forces  that  account  toi'  the  high  standard  of 
living,  and  the  corresponding  high  wages  that  prevail  in 
the  Tuited  States.  A  large  part  of  the  engine  crews,  and 
of  oilier  ship  luinds,  particularly  on  the  Pacific,  are  for- 
eigners shipped  in  foreign  })orts,  mid  it  is  probable  that 
the  masters  of  American  vessels  are  not  obliged  to  pay 
such  foreigners  higher  wages  than  are  paid  by  masters 
of  other  vessels;  although  it  is  probable  that  when  aliens 
are  employed  a  second  time — i.  e.,  are  hired  in  an  Amer- 
ican port — the  wages  demanded  by  them  may  be  influ- 
enced by  the  wages  current  in  the  United  States. 

■  The  higher  wages  and  better  conditions  of  life  on 
American  vessels  are  by  no  means  to  be  deplored;  they 
ought,  whatever  the  needs  of  the  American  merchant 
marine  may  be,  to  be  carefully  maintained.  Indeed,  it 
seems  necessary  that  we  should  make  seafaring  a  more 
attractive  calling,  if  we  are  to  build  up  our  merchant 
fleet,  and  train  the  men  required  to  man  our  growing 
navy.  Since  1860,  our  marine  engaged  in  foreign  com- 
merce has  been  declining;  at  the  same  time  our  industries 
on  the  land  have  been  making  rapid  progress.  American 
men  and  boys  have  more  and  more  turned  away  from  our 
declining  over-sea  marine,  and  have  chosen  callings  at 
home,  where  greater  prospects  were  offered.  In  adopt- 
ing measures  for  building  up  our  merchant  marine,  we 
shall  unquestionably  find  great  difficulty  in  sohang  this 
question  of  securing  a  personnel  of  Americans  for  our 
vessels. 

The  foregoing  outline  of  the  policy  which  the  United 
States  has  pursued  toward  the  shipbuilding  industry,  the 
ownership  and  operation  of  vessels,  and  toward  the  men 
aboard  the  ships  under  our  flag,  is  sufficient  to  demon- 


MERCANTILE  MARINE  POLICY  OF  UNITED  STATES       265 

strate  the  fact  that  our  coimtrv  has  dealt  liberally  with 
our  maritime  interests.  Xevertheless,  the  results  of  our 
policy,  as  far  as  our  shipbuilding  industry  and  our  marine 
engaged  in  foreign  trade  are  concerned,  have  been  a  fail- 
ure. Our  foreign  competitors  have  taken  away  from  us 
not  only  the  share  we  formerly  had  of  the  general  ocean- 
carrying  trade  of  the  world,  but  have  also  secured  nine 
tenths  of  the  business  of  carrying  our  own  foreign  com- 
merce. The  causes  that  account  for  our  decline  in  the 
ocean-carrying  trade,  and  the  measures  that  have  been 
proposed  to  aid  in  building  up  our  shipbuilding  and  ship- 
ping interests,  will  be  considered  in  the  following  chap- 
ters. 

REFERENCES  FOR  FURTHER  READING 

Chamberlain,  E.  T.  "Annual  Reports  of  the  Commissioner  of 
Navigation."  Department  of  Commerce  and  Labor,  Wash- 
ington. 

"Report  of  the  Merchant  Marine  Commission,  1905."  (This 
commission  consisted  of  five  senators  and  five  members  of 
the  House  of  Representatives.  The  secretary  of  the  com- 
mission was  Mr.  Winthrop  L.  Marvin.  The  report  and  testi- 
mony were  printed  in  three  volumes  by  the  United  States 
Government  Printing  Office,  Washington,  D.  C.) 

SoLEY,  J.  R.  "The  Maritime  Industries  of  the  United  States." 
This  essay  by  Mr.  Soley  is  a  part  of  Vohime  I  of  "The  United 
States  of  America,"  by  N.  S.  Shaler,  1S94. 


CHAP  r Ell    XTX 

CONDITION    OF    THE    AMERICAN    SHIPBUILDING    INDUSTRY. 
CONSIDERATION    OF    CAUSES    AND    REMEDIES 

The  shipbuilding  indiistrv  in  the  United  States  has 
developed  in  accordance  with  the  progress  of  our  mer- 
cantih'  and  naval  marines.  Until  the  Civil  War  our  mer- 
chant marine  was  large,  and  increased  year  by  year,  and 
the  American  shipbuilders  carried  on  an  expanding  busi- 
ness. They  not  only  supplied  the  shipping  purchased  by 
Americans,  but  also  sold  a  large  tonnage  to  foreign  buy- 
ers; because  our  shipwrights  could  build  wooden  vessels 
cheaper  and  better  than  their  competitors  could.  The 
American  packets  and  clipper  ships  enjoyed  an  enviable 
reputation  for  seaworthiness  and  speed.  The  decline  in 
the  demand  for  American-built  ships  among  home  and 
foreign  buyers  fell  off  with  the  gradual  substitution  of 
iron  for  wood  in  vessel  construction  after  1850,  and  with 
the  decrease,  which  began  in  1861,  in  the  tonnage  of 
American  vessels  engaged  in  the  international  carrying 
trade. 

Shipbuilding  activity  in  the  United  States  reached  its 
maximum  during  the  decade  ending  with  18G1.  During 
those  ten  years  there  were  3,600,7-1:8  tons  of  shipping 
constructed  in  American  yards.  The  output  was  greatest 
in  1854  and  1855,  when  1.110.496  tons— about  560,000 
tons  annually — were  launched.  Those  are  the  only  years 
in  our  hist(U-v  when  the  annual  tonnage  of  shipping  con- 
structed has  exceeded  500,000.  During  this  decade  pre- 
266 


CONDITION   OF   AMERICAN   SHIPBITILDING  267 

ceding  the  Civil  War  the  total  tonnage  of  the  American 
merchant  marine  rose  from  3,500,000  tons  to  5,500,000, 
and  during  those  years  there  were  350,000  tons  of  ship- 
})ing  sold  to  foreign  l)nyers. 

The  Civil  War  re([nirc(l  the  constrnction  of  a  great 
many  war  vessels,  and  it  wonld  not  have  seriously 
cri])))led  our  shi|)l)uilding  industry  had  the  war  been  fol- 
lowed by  a  demand  for  Amei-ican-built  ships.  The  de- 
mand did  not  follow  the  war,  because  foreign  buyers 
desired  to  ])urchase  iron  ships,  which  our  yards  could  not 
supply,  and  because  ships  operated  under  the  American 
Hag  were  not  able  to  compete  successfully  with  loreigu 
vessels  in  the  international  carrying  trade,  ^[oreover,  for 
twenty  years  following  the  Civil  War  the  United  States 
Grovernment  neglected  its  navy  and  jdaced  no  orders  for 
war  vessels  among  our  shipbuilders. 

The  effect  of  these  causes  upon  the  ikH-lino  (d"  our 
shipbuilding  activity  for  over  thirty  years  after  the  (^ivil 
War  is  revealed  in  the  statistics  of  tcmnage  annually 
constructed.  At  the  end  of  the  war  our  shipyards  were 
turning  out  annually  between  300,000  and  400,000  tons 
of  ships  of  all  classes;  but  with  the  exception  of  two 
periods  of  temporary  revival — one  in  1873  and  1874,  and 
the  other  in  1801 — the  annual  oiit])ut  did  not  n^acdi 
300,000  tons  until  1890.  Moreover,  these  figures  do  not 
indicate  the  real  decline  in  our  shipbuilding  industry,  be- 
cause they  include  the  tonnage  constructed  for  our  in- 
creasing coastwise  trade,  and  for  our  Great  Lakes  and 
other  inland  waterways  where  ouly  American-built  shijis 
may  be  employed.  Tlic  mci-cliaut  tonnage  annually  Kuilt 
ou  our  seaboard  amounted  to  al)out  .'500,000  tons  at  the 
close  of  the  Civil  War,  after  which  it  declined  to  about 
100,000  by  1880.  A  short  revival  came  in  the  early 
eighties,  and  another  in  the  early  nineties;  hut  witli  those 
exceptions  the  coastwise  shipyards  made  no  lu'adway  aftc^r 
19 


268     OCEAxN   AND  INLAND  WATER  TRANSPORTATION 

1880  until  the  prosperous  period  beginning  with  1899 
was  reached,  then  six  years  followed  during  which  there 
was  an  average  output  of  250,000  tons.  'I'he  vessels  con- 
structed by  our  seaboard  yards  are  partly  for  the  foreign 
trade,  but  more  largely  for  our  expanding  coasting  trade. 
'Our  yards  are  not  turning  out  shi])s  for  sale  to  foreigners, 
and  not  many  shi])s  to  be  bought  by  Americans  for  reg- 
istry under  our  flag. 

"Why  is  it  that  the  shipyards  on  the  Xew  England  sea- 
board and  along  the  Delaware  and  Chesapeake  cannot 
construct  ships  in  competition  with  the  builders  on  the 
(^lyde,  Tyne,  and  Severn^  Why  is  it  that  the  only  buy- 
ers of  American-built  vessels  are  those  who  ])urchase 
ships  to  be  operated  under  our  flag,  and  arc  compelled 
by  our  navigation  laws  to  secure  their  vessels  from 
American  yards?  "  What  is  a  steamship,  but  a  locomo- 
tive and  a  steel  bridge  wrought  together?"  We  export 
locomotives  to  many  countries,  and  build  1)ri(lges  in  vari- 
ous remote  parts  of  the  world,  but  we  cannot  compete 
with  the  foreign  builders  in  the  construction  of  steel 
vessels.  We  can  do  as  good  work  as  any  builders  can, 
but  the  foreign  shipyards  can  do  the  work  for  less  cost. 

That  ships  can  be  built  more  cheaply  under  present 
conditions  in  British  and  German  yards  than  in  American 
yards  is  a  well-established  fact.  The  Merchant  Marine 
Commission  stated,  in  its  report  made  in  January,  1905, 
that  "  recent  actual  bids  of  American,  British,  and  Ger- 
man yards  for  typical  T^orth  Atlantic  steamships,  which 
have  been  communicated  to  the  commission,  show  an 
American  excess  of  cost  of  about  forty-seven  and  thirty- 
seven  jier  cent."  Mr.  P.  A.  S.  Franklin,  vice  president 
of  the  International  ^NFercantile  Marine  Cominmy — a 
company  owning  ships  under  several  flags — testified  be- 
fore this  commission  that  "  an  American-built  steamship, 
suitable  for  the  J^orth  Atlantic  trade,  would  cost  about 


CONDITION   OF  AMERICAN  SHIPBUILDING  269 

forty  per  cent  more  than  a  British-built  steamship."  Mr. 
¥.  W.  Wood,  president  of  the  Maryland  Steel  Company, 
testified  that  "  the  average  difference  in  cost  between 
American  and  British  ships  under  present  conditions  is 
from  thirty  to  fifty  per  cent." 

The  price  of  steamships  in  British  yards  in  1!M)4 
and  1005  was  l)elow  the  normal  average,  because  of  the 
small  demand  for  ships  during  those  years;  but  even  in 
])rosperous  times  the  British  and  German  yards  arc  ap- 
parently able  to  construct  merchant  vessels  for  much  less 
than  the  American  builder  must  charge.  The  above  es- 
timates indicate  that  ordinary  freight  and  passenger  ves- 
sels would  have  cost  about  forty  per  cent  more  in  1904 
if  built  in  an  American  yard  than  if  constructed  in  Great 
Britain  or  Germany.  Previous  estimates  have  placed 
the  cost  of  the  American-built  ship  from  fifteen  to  twenty- 
five  per  cent  above  the  cost  of  the  foreign-built  vessel. 
AVhile  the  exact  difference  between  American  and  foreign 
costs  cannot  be  stated,  all  witnesses  are  agreed  that  the 
American  costs  are  higher.  Under  present  conditions  the 
foreign  builder  probably  has  the  advantage  of  the  Amer- 
ican constructor  by  fully  twenty  or  twenty-five  per  cent. 
The  difference  in  cost,  whatever  it  may  be,  is  cpiite 
enough  to  enable  the  foreigner  to  underbid  successfully 
our  shipbuilders,  and  the  result  is  that  an  American  com- 
pany desiring  to  increase  its  fleet  usually  orders  the  ships 
built  abroad,  and  then  operates  the  vessels  under  some 
foreign  flag.  While  this  chapter  is  being  written,  the  an- 
nouncement is  made  that  the  United  Fruit  Company — an 
American  corporation  controlling  most  of  the  fruit  trade 
into  the  United  States  from  the  West  Indies  and  Central 
America — has  just  placed  an  order  for  some  steamers 
with  a  British  builder. 

The  chief  causes  accounting  for  the  higher  cost  of 
building  ships  in  this  country  than  in  Great  Britain  or 


270     OCEAN  AND  INLAND  WATER  TRANSPORTATION 

Germany  are  (1)  the  higher  prices  of  materials  in  the 
United  States,  (2)  the  higher  labor  costs  in  our  shipyards, 
and  (3)  the  small  amount  of  tonnage  constructed  in  our 
yards.  The  first  of  these  causes  is  no  longer  a  factor  of 
great  importance,  l)ut  the  second  and  third  causes  operate 
Very  powerfully  against  the  American  slii})l)uild(!rs. 

(1)  The  price  of  steel  is  ordinarily  as  low  in  the 
United  States  as  in  any  country;  and  some  forms  of  steel 
and  some  manufactured  articles  made  of  steel  can  be  pro- 
duced cheaper  here  than  abroad;  nevertheless,  the  ship- 
builders on  the  Clyde  and  Tync  can  usually  secure  their 
steel  plates,  boilers,  and  engines  more  cheaply  than  they 
can  be  obtained  under  present  conditions  in  an  American 
shipyard,  because  the  British  builders  construct  several 
ships  at  once  of  the  same  design.  Materials  and  equip- 
ment for  several  vessels  can  be  secured  more  economic- 
ally than  they  can  be  obtained  for  one  or  two  ships, 
just  as  a  real-estate  operator  can  buy  the  materials  for 
several  houses  to  be  constructed  simultaneously  at  a  lower 
cost  per  house  than  he  could  buy  the  materials  for  a  single 
house.  Likewise,  a  British  builder  has  the  advantage  of 
the  buyer  who  can  du])li('ate  his  orders  frequently.  The 
steady  buyer  who  purchases  large  quantities  is  the  one 
who  secures  the  lowest  bids. 

American  slii})l)uild('i's  have  also  testified  that  the 
fluctuations  in  the  price  of  steel  in  the  United  States  are 
much  greater  than  in  Great  Britain,  and  that  this  fluctua- 
tion is  a  handicap  in  l)id<liiig  for  contracts.  Two  main 
reasons  have  been  assigned  for  the  larger  variations  of 
steel  prices  in  this  country  than  in  the  United  Kingdom. 
One  cause  is  that  of  the  duty  which  we  place  upon  im- 
ported steel.  This  duty  excludes  foreign-made  steel  and 
steel  products  from  the  United  States,  and  causes  the 
prices  of  steel  in  this  country  to  vary  with  the  changing 
conditions  of  our  domestic  production  and  consumption, 


CONDITION   OF  AMERICAN   SHIPBUILDING  271 

and  deprives  us  of  the  steadying  influences  upon  prices 
that  result  from  enabling  the  buyer  to  draw  upon  a  world 
market. 

Our  tarifl"'  on  steel,  moreover,  has  sometimes  resulted 
in  American  steel  being  sold  to  foreign  shipbuilders 
cheaper  than  to  American.  The  president  of  the  Amer- 
ican Shipbuilding  Company  testified  before  the  Merchant 
Marine  Commission,  at  Cleveland,  June  28,  1904,  that 
*'  recently  one  of  our  largest  steel  mills  sold  abroad  100,- 
000  tons  of  steel  ]>late.  They  delivered  it,  I  understand, 
at  Belfast,  at  $24-  a  ton.  That  would  practically  mean, 
with  ocean  rates  as  they  now  are,  $22  a  ton  at  tide  water 
(in  the  United  States).  They  are  charging  us  to-day,  at 
Pittsburg,  $32  a  ton."  From  the  point  of  view  of  the 
manufacturer  of  steel,  there  may  be  good  business  reasons 
for  disposing  of  his  sur])lus  ]U'()duct  at  a  reduced  price 
to  the  foreign  buyer,  instead  of  depressing  the  price  at 
home  by  selling  the  surplus  upon  the  domestic  market; 
but  the  depressing  effect  of  this  ])olicv  upon  the  American 
shipbuilding  industry  is  unquestionable. 

The  variations  in  the  price  of  steel  recpiired  in  sliip- 
biiilding  in  Great  Britain  are  lessened  to  some  extent  by 
the  c<)t"»])erati(>n  of  the  steel-manufacturing  and  shipl)uild- 
iiig  industries.  The  celebrated  British  firm  of  Vickcr's 
Sons  and  Maxim  is  an  instance  of  tlic  cuiiibiii:iti(in  of 
steel  manufacturing,  arinoi'-])late  making,  and  shijibuild- 
ing  under  a  single  management.  As  Dr.  John  Franklin 
Crowell,  formerly  Commci-ce  Ex])ert  for  the  United  States 
Bureau  of  Statistics,  said  in  1900  in  a  report  on  the 
shipping  industry  of  the  United  States,  "  steel  production 
is  the  fundumcutal  imlusti'v  witli  I'cgai'd  to  shipbuilding, 
and  the  chief  ol)stacle  in  the  evolution  of  the  latter  indus- 
try in  the  TTnited  States  to-day  is  the  fluctuation  of  prices 
and  the  lack  of  stability  iu  llic  sled  market.  Just  as 
bridge  buihling  has  had  to  expand  into  steel  uumufacture, 


272     OCEAN  AND   INLAND  WATEIl  TRANSPORTATION 

so  will  «te('l  slii|)l)iiil(liiii:  lijivc  t<»  ahsorl)  steel  jji'ddiieiiij^ 
for  its  own  protection  from  iin])ossible  j)riccs,  which  inter- 
fere so  seriously  with  the  even  tenor  of  industry." 

The  accuracy  of  this  analysis  is  evidenced  by  the 
efforts  the  Anierican  sliij)building  industry  has  made  to 
bring  steel  making  and  shij)  construction  under  a  common 
control.  Unfortunately,  the  most  important  attempt  as 
yet  made  to  accomplish  this  was  defeated  by  the  highly 
speculative  methods  adopted  in  the  formation  of  the 
United  States  Shipbuilding  Company,  which  was  to  have 
brought  together  the  Bethlehem  Steel  Coni})any  and  nu- 
merous shipbuilding  companies. 

Without  doubt  American  capitalists  will  ere  long  be 
able  to  bring  about  the  combination  of  the  shipbuilding 
and  steel-making  industries  in  snch  a  way  as  to  give  the 
American  shipyard  the  advantage  of  stable  costs  for  ma- 
terials. Moreover,  it  is  probable  that  if  American  ship- 
builders can  succeed  in  reducing  the  high  labor  costs 
that,  more  than  any  other  cause,  make  vessels  constructed 
in  our  shipyards  more  expensive  than  those  constructed 
abroad,  they  will  be  able  not  only  to  establish  stable 
prices  for  their  necessary  materials,  but  will  also  be  able, 
in  time,  to  enlarge  and  specialize  their  business  so  as  to 
secure  steel,  boilers,  engines,  etc.,  as  cheaply  as  they  can 
be  obtained  b}''  any  British  or  German  builder. 

(2)  The  handicap  of  higher  labor  costs  is  an  obstacle 
which  the  American  shipbuilder  will  find  difficult  to  over- 
come. Although  it  is  not  probable  that  the  labor  costs 
])er  ton  of  shipping  constructed  in  American  yards  will 
always  be  higher  than  in  foreign  yards,  there  is  no  imme- 
diate prospect  of  our  builders  being  able  to  reduce  those 
costs  to  the  foreign  level.  Labor  costs  are  a  function  of 
two  variables,  wages  and  the  nnits  of  work  performed; 
consequently  it  is  hardly  possible  to  compare  accurately 
the    labor    costs    in    American    and    foreign    shipyards. 


COXDITIOX  OF  AMERICAN  SHIPBUILDING  273 

"Wages  can  be  compared  without  great  difficulty;  but  the 
labor  costs  at  home  and  abroad  per  unit  of  product  in  the 
various  operations  connected  with  building  a  ship  cannot 
readily  be  contrasted;  indeed,  the  data  required  for  such 
a  comparison  probably  do  not  exist. 

The  scale  of  wages  paid  in  American  sliii)yards  is 
unquestionably  higher  than  in  foreign.  The  Merchant 
J\iarine  Commission  stated  in  its  report  that  "■  evidence 
before  the  commission,  notably  in  the  important  hearing 
of  November  19,  1904,  at  Newport  Xews,  shows  that 
wages  in  American  shipyards  are  from  fifty  to  one  hun- 
dred per  cent  above  wages  of  similar  labor  in  Europe." 
The  commission,  however,  is  of  the  opinion  that  "  both 
the  labor  and  the  administration  in  American  shipyards 
are  more  efficient  than  in  foreign  shipyards,  though  this 
superiority  is  far  from  bridging  the  entire  difference  in 
cost." 

The  lower  labor  costs  in  British  shipyards,  as  com- 
pared with  American,  result  not  only  from  the  lower 
wages  paid,  but  also  from  two  other  causes:  the  stand- 
ardizing of  processes,  and  the  large  amount  of  labor  done 
on  the  piece-work  system.  The  builder  who  constructs 
several  cargo  steamers  at  the  same  time,  and  can  repeat 
his  operations,  as  a  whole  or  in  large  part,  several  years 
in  succession,  can  secure  both  materials  and  labor  at  an 
economical  figure.  His  workmen  repeat  their  tasks  and 
increase  their  efficiency,  the  builder  standardizes  his 
processes,  and  the  piece-work  plan  of  payment  becomes 
possible.  The  great  success  achieved  by  Americans  in 
the  economical  manufacture  of  stationary  and  locomotive 
engines,  machinery,  and  tools  has  been  the  result  mainly 
of  standardizing  the  parts  and  the  processes.  The  suc- 
cess of  foreign  shipbuilders  is  to  a  large  extent  due  to 
the  same  cause. 

(3)  The    German,    and   especially    the    British,    ship- 


274     OCEAN  AND  INLAND  WATER  TRANSPORTATION 

builders  have  the  beiielit  of  (Uiini:;  business  on  a  large 
scale.  British  yards  annually  launch  between  1,500,000 
and  2,000,000  tons  of  shipjiin.^,  and  over  half  f>f  the 
output  is  sold  to  foreign  buyers.  In  1I'<M  American 
yards  turned  out  oT8,000  tons;  the  oiit|)iit  during  the 
banner  year  of  1001  was  4S.''>,000  t<»iis,  and  the  only  buy- 
ers were  Americans.  Tlie  Ib'itisli  yards  thus  construct 
a])ont  four  tons  of  shippinii;  to  one  built  in  America;  and 
the  British  builders  have  the  advantage  of  a  world  mar- 
ket where  the  fluctuations  in  demand,  although  large, 
are  much  less  than  are  characteristic  of  a  market  re- 
stricted to  but  one  country,  and  that  a  country  whose 
shipping  engaged  in  international  trade  comprises  but  one 
seventh  of  its  total  marine. 

The  British  builders  have  the  advantages  resulting 
from  large-scale  production,  from  specialization  in  work, 
and  from  repetition  of  orders.  The  typical  yard  on  the 
Clyde  is  one  having  several  ships  of  the  same  or  similar 
design  in  simultaneous  construction.  The  usual  con- 
ditions  prevailing  in  an  American  shipyard  were  well  de- 
scribed by  Mr.  Lewis  Nixon  in  1900,  who  said:  "  In  one 
of  the  largest  shipyards  in  this  country  there  are  five 
slips,  each  capable  of  building  a  Campania,  and  recently 
on  one  was  a  tug,  on  another  a  battleship,  on  another  a 
ferryboat,  on  another  a  yacht,  and  on  another  a  revenue 
cutter."  And  Mr.  ISTixon  adds:  "It  is  absolutely  impos- 
sible to  practice  economies  under  such  circumstances,  and 
build  the  ships  so  that  they  would  compare  favorably  in 
cost  with  ships  built  abroad." 

While  it  is  probable  that  the  shipbuilding  industry  in 
the  United  States  may  ultimately  be  able  to  overcome  the 
disadvantages  by  which  it  is  now  hampered,  and  may  in 
time  be  able  to  produce  ships  for  our  international  trade, 
and  for  the  world's  ship  market,  in  successful  competition 
with  foreign  shipyards,  it  is  certain  that  our  shipbuilders 


CONDITION  OF  AMERICAN  SHIPBUILDING  275 

will  not  be  able  to  do  this  in  the  near  future.  The  Amer- 
ican people  for  patriotic  and  economic  reasons  and  our 
Government  for  military  and  naval  reasons,  can  hut  de- 
])lore  the  unpromising  status  of  oui-  slii|iliiiil(liiii:  iinhis- 
try.  Although  the  disposition  of  tlic  jx'oplc  of  the 
United  States  has  been  to  deal  lilicnilly  with  our  sliij)- 
building,  as  well  as  with  every  other  innnufachiriui:'  in- 
dustry, and  although  our  shipbuilders  have  been  aided  by 
our  laws  restricting  American  registry  to  ships  built  in 
our  own  comitry,  by  the  law  denying  foreign  vessels  the 
privilege  of  engaging  m  our  coastwise  commerce,  by  the 
law  allowing  a  drawback  on  the  duties  payable  on  ma- 
terials imported  for  shipbuilding,  and  l)y  the  extensive 
naval  programme  of  our  Government  during  recent  years, 
nevertheless  the  policy  of  the  United  States  toward  ship- 
building has  not  resulted  in  building  up  that  industry. 

Is  it  advisable  that  -the  United  States  should  change 
its  policy  toward  the  shipbuilding  industry?  The  answer 
to  this  question  must  depend  upon  the  prospect  of  our 
being  able,  through  Government  aid  and  at  a  warrantabk' 
cost,  to  establish  such  conditions  as  will  enable  our  shij)- 
builders  to  compete  with  foreign  builders,  and  enable  our 
shipping  interests  so  to  increase  the  tonnage  of  shi^jping 
under  our  flag  as  to  restore  to  American  ships  a  large 
share  of  the  transportation  of  our  foreign  commerce. 

The  fact  must  be  kept  in  mind  that  a  large  develop- 
ment of  our  shipbuilding  industry  will  not  be  possible 
without  the  growth  and  i)rosperity  of  our  over-sea  mer- 
chant marine.  Shipbuilding  and  ocean  navigation  are 
inseparable  industries;  and  a  complete  answer  to  the  (jues- 
tion  as  to  the  advisability  of  changing  our  policy  toward 
shipbuilding  cannot  be  made  until  the  aids  to  ocean  nav- 
igation, to  be  discussed  in  the  next  chapter,  have  been 
considered. 

Among  the  proposals  that  have  been  suggested  for 


276     OCEAN  AND   INLAND  WATER  TRANSPORTATION 

giving  increased  Government  aid  to  the  American  ship- 
l)nilding  industry  is  one  made  by  the  Merchant  Marine 
Commission  of  1904,  which  recommended  that  the  law 
])ermitting  materials  nsed  in  shipbuilding  to  be  imported 
duty  free,  be  so  extendc^l  as  to  allow  ships  so  built  to 
be  operated  for  six  months  each  year  in  tlie  coasting 
trade,  instead  of  only  two  months  as  at  present.  The 
present  law  allows  vessels  employed  in  the  trade  between 
our  Atlantic  and  Pacific  seaboards  to  be  built  of  materi- 
als imported  free  of  duty,  and  the  Merchant  Marine  Com- 
mission recommends  that  the  same  privilege  be  granted  to 
vessels  constructed  for  our  trade  with  the  Philippines. 
But  few  vessels  have  been  built  of  imported  materials, 
and  the  privilege  of  engaging  for  two  months  in  the  coast- 
wise trade  has  not  induced  shipowners  operating  vessels 
in  the  international  trade  to  buy  ships  in  the  United 
States  and  run  them  under  American  registry. 

The  law  permitting  the  use  of  imported  materials  in 
shipbuilding  was  intended  to  increase  the  tonnage  of  ship- 
ping constructed  in  the  United  States,  and  as  the  privi- 
leges granted  by  the  law  have  proven  inadequate,  they 
should  be  extended.  The  surest  way  to  make  the  law 
effective  in  aiding  our  shipyards  would  be  to  permit  our 
shipbuilders  to  import  duty  free  all  materials  or  machin- 
ery they  may  desire  to  use  in  constructing  any  ship, 
whether  it  is  to  be  registered  for  the  foreign  trade  or  en- 
rolled for  the  domestic  service.  Indeed,  it  would  seem 
just  to  give  our  struggling  shipyards  the  advantage  of 
buying  their  materials  and  equipment  wherever  they  can 
be  secured  most  economically.  Moreover,  this  modifica- 
tion of  tariff  laws  seems  desirable  from  the  point  of  view 
of  the  public  interest.  The  American  people,  for  eco- 
nomic and  patriotic  reasons,  are  united  in  desiring  to 
strengthen  our  maritime  interests,  and,  whatever  their 
views  may  be  individually  regarding  protection  or  free 


CONDITION   OF  AMERICAN  SHIPBUILDING  277 

trade,  tlu'v  iniist  wisli  our  (lovcriiniciit  to  remove  as 
many  as  possible  of  the  obstacles  in  the  way  of  the  de- 
velopment of  the  manufacture  of  ships  in  the  United 
States. 

Those  engaged  in  steel  manufacture,  and  in  making 
the  machinery  required  in  equipping  vessels,  naturally 
desire  the  maintenance  of  a  tariif  on  all  imports  of  steel 
and  steel  manufactures;  but  the  position  of  the  steel  in- 
dustries in  the  United  States  is  so  secure  that  the  exemp- 
tion of  ship  materials  from  the  present  import  duties 
could  hardly  retard  the  progress  of  steel  making;  and  steel 
manufactures  in  this  country.  In  most  instances  our 
manufacturers  would  be  able  to  meet  successfully  the 
competition  of  foreign  producers ;  and  if  there  should  de- 
veloj)  a  large  shipbuilding  industry  in  the  United  States, 
the  steel  industries  could  hardly  fail  to  benefit  thereby. 

In  several  countries — France,  Italy,  Austria-Hungary, 
Norway,  and  Japan — the  government  grants  construc- 
tion bounties  to  encourage  shipbuilding.  The  bounties 
given  by  France  to  her  shipbuilders  have  been  especially 
liberal  for  twenty-five  years.  The  first  law  providing  for 
construction  bounties  was  passed  in  1881.  This  law  was 
modified  by  the  Act  of  1893,  which  is  still  in  force.  The 
provisions  of  this  later  act  were  as  follows:  For  iron  or 
steel  steamers  and  sailing  vessels,  a  construction  bounty 
of  C>5  francs  ($12.54)  per  ton  was  granted;  for  wooden 
vessels  of  150  tons  or  more,  40  francs  ($7.72);  for 
wooden  vessels  of  less  than  150  tons,  30  francs  ($5.79). 
Til  addition  to  these  construction  bounties  the  builders 
also  received  15  francs  for  each  metric  ton  in  weight  of 
engines,  boilers,  and  anxiliaiw  machinery  installed.  This 
latter  aid  also  includes  new  parts  of  nuichinery  installed 
in  repair  of  a  ship.  When  new  boilers  are  jdaced  in  ves- 
sels, the  ownei's  are  entitled  to  receive  15  francs  for  each 
ton   of  weight  of  the  new  boilers.      These  bounties,    al- 


27S     OCEAN   AND   INLAND  WATER  TRANSPORTATION 

tlioiigh  liberal,  liavo  failed  to  overcome  the  adverse  con- 
ditions under  which  shijjbnildinii'  must  he  carried  on  in 
France,  as  compared  with  Germany  and  the  United  King- 
dom. The  failure  of  the  French  policy  of  construction 
l)omities  does  not  prove  that  a  similar  policy  would  fail 
in  the  Ignited  States,  where  the  conditions  are  more  fa- 
voralile  for  bnihling  steel  vessels,  l)ut  the  experience  of 
l''i';iiice  is  not  encouraging. 

I'here  are  well-recognized  economic  objections  to  aid- 
ing any  form  of  manufacturing  industry  by  means  of 
Government  bounties.  Industries  thus  aided  develop  in 
response  to  an  artificial  stimulus  in  so  far  as  the  bounties 
are  successful,  instead  of  advancing  step  by  step  with  the 
increase  in  the  economic  demand.  Moreover,  industries 
built  u])  by  bounties  tend  to  become  dependent  upon  the 
bounty,  instead  of  independent  of  Government  aid.  The 
inchistry  based  on  economic  demand  has  a  stable  founda- 
tion ;  whereas  the  industry  whose  growth  has  been  quick- 
ened by  State  bounties  rests  upon  an  insecure  basis. 

The  surest  way  to  strengthen  the  American  shipbuild- 
ing industry  is  to  create  a  larger  demand  for  American 
ships — to  increase  the  use  of  our  ships  -in  the  interna- 
tional carrying  trade.  This  means  that  the  Government 
can  best  aid  shipping  by  assisting  in  enlarging  the  ton- 
nage of  our  merchant  marine  engaged  in  the  foreign 
commerce  of  our  own   and   other  countries. 


REFERENCES  FOR  FURTHER  READING 

Consult  references  at  the  close  of  the  preceding  chapter. 

"The  Shipping  Industry  of  the  United  States  and  Its  Relation  to 
the  Foreign  Trade."  Monthly  Suniniarj'  of  Commerce  and 
Finance,  December,  1900.  Bureau  of  Statistics,  Washington, 
D.  C.  (This  unsigned  report  was  prepared  by  John  Franklin 
CYowell,  Ph.D.,  formerly  Commerce  Expert  for  the  Bureau  of 
Statistics.) 


CHAPTER   XX 

CAUSES    OF    THE    DECLINE    OF    THE    AMERICAN    MARJNE    IN 
THE    FOKEIGN    TKADE 

The  decline  in  the  tonnage  of  slii})i)in_<>;  engaged  nnder 
the  American  tlag  in  tlie  foreign  trade  of  tin;  United 
States  and  other  countries  is  so  well  kn(t\vn  that  it  will 
be  necessary,  in  this  connccti(^n,  to  present  only  a  brief 
review  of  the  facts  and  tigures  regarding  the  past  and 
present  status  of  our  deep-sea  merchant  marine.  The 
tonnage  of  American  vessels  engaged  in  the  foreign  trade 
— our  registered  tonnage  as  contrasted  with  the  "  en- 
rolled "  shipping  engaged  in  the  domestic  trade — reached 
its  maximum  in  18(51,  when  the  total  of  2,1:0(>,S{)-1  tons 
net  register  was  reached.  At  the  close  of  the  (^ivil  War 
the  total  was  nearly  1,000,000  tons  less  than  at  the  open- 
ing of  that  great  struggl4:\  Tntil  1S80  the  hguivs  aver- 
aged about  1,500,000  tons;  but  in  ISSO  a  decline;  began 
that  continued  with  but  occasional  iiiteri'ujtlioii  until 
1898,  when  the  minimum  of  only  'i'-2{'),)l\-'>  tons  was 
reached.  The  Spanish-American  War  of  that  year,  and 
the  demands  of  our  increased  (Miiiiinei'ce,  bi-ought  the 
tigures  above  800,000  tin;  next  year,  and  the  suhscMpient 
increase  raised  the  total  of  IDOf)  to  954,51;]. 

While  our  registered  tonnage  has  been  falling  otf, 
our  enrolled  shipping  has  been  increasing.  During  the 
past  twenty-five  years  the  domestic  fleet  has  risen  nearly 
3,000,000  tons — the  increase  during  the  last  five  years  hav- 
ing been  especially  rapid.     In  1890  the  total  of  enrolled 

279 


2S()     OCEAN    AM)    J.XLAM)   MATKH   TKANSIM  )H'l  VHON 

touuiii^e  was  soiiicwliat  iiiidcr  l,()0(),<M)(i  tons,  and  in  \'.>()~) 
the  figures  were  5,50:i,0;J0.  'Idic  total  tonnage  of  llie 
United  States  merchant  marine  in  I'.H).") — tliiit  engaged  in 
the  foreign  and  coastwise  li'ades  and  in  llie  fisheries — 
was  C, 45(5, 54.'].  This  is  the  highest  point  tlie  tonnage  of 
our  shipjjing  has  cA'cr  reaclie(l,  and  tlie  gain  during  tlic 
past  twenty-fiv(.'  years  has  l»een  HS.T  pei'  ceiil.  t>nt  tlie  in- 
crease has  all  been  in  our  coastwise  and  lake  fleets.  In 
that  part  of  our  commerce  that  is  open  to  shi])s  under 
foreign  flags,  Amei'ican  vessels  have  not  been  able  to  lioM 
their  own  in  competition  with  their  foreign  rivals;  what 
progress  our  shi]H)ing  has  made  has  been  in  the  carrying 
trade  of  which  it  has  had  an  exclusive  monopoly. 

The  decline  in  the  tonnage  of  the  American  marine 
engaged  in  international  trade  is  easily  explained,  and  is 
fully  accounted  for  by  the  following  seven  causes: 

(1)  The  gradual  but  steady  substitution  of  steamers 
for  sailing  vessels,  and  of  iron  for  wooden  hulls  after 
1850,  transferred  to  the  United  Kingdom  the  superiority 
of  advantage  which  the  United  States  had  possessed  up  to 
that  time  in  the  construction  and  operation  of  ships.  The 
iron  industries  of  Great  Britain  in  1850  were  twenty  five 
or  thirty  years  in  advance  of  those  in  the  United  States, 
and  American  manufacturers  were  unable  to  compete 
with  the  British  either  in  the  production  of  iron  for  hulls 
or  of  machinery  for  motive  power.  Moreover,  until 
about  1890,  steaming  coal  was  far  cheaper  in  Great 
Britain  than  in  this  country.  The  construction  of  iron 
ships  in  the  United  States  did  not  begin  much  before 
1870,  and  then  in  but  a  small  way.^      Vessel  owners  op- 

'  "The  early  statistics  of  iron  shipbuilding  in  the  United  States  have 
never  been  fully  compiled.  The  tables  of  the  Bureau  of  Navigation  in 
the  Treasurj'  Department  begin  in  1S69.  with  an  iron  tonnage  built  of 
4,584  tons  out  of  a  total  tonnage  built  of  275.230  tons,  or  1.6  per  cent. 
We  know  that  iron  vessels  were  built  before  this  date  in  this  count rv — 


CAUSES  OF   DECLINE  OF  THE  AMERICAN  MARINE     281 

erating  ships  under  the  American  flag  did  not  desire  to 
purchase  iron  steamers;  at  least,  their  demand  was  not 
sufficient  to  cause  American  shipyards  to  be  reconstructed 
and  organized  for  building  iron  vessels.  Great  Britain 
was  prepared  to  change  from  wood  to  iron,  and  from  sail 
to  steam,  and  the  United  States  was  not;  the  result  was 
that  Great  Britain  secured  a  long  lead  over  us  in  building 
and  operating  ships. 

(2)  While  this  revolution  was  taking  place  in  the  busi- 
ness of  shipbuilding  and  navigation,  two  unfortunate 
causes  tended  to  weaken  the  power  of  our  maritime  in- 
terests to  compete  with  those  in  Great  Britain.  One 
cause  was  the  withdrawal  in  1858  of  the  support  which 
the  Federal  Government  had  given  our  shipping  under 
the  laws  of  1845  and  subsequent  years.  A  subsidy  law 
was  passed  in  1845  providing  for  ocean  mail  contracts, 
and  this  law  was  supplemented  by  another  act  passed  two 
years  later. 

According  to  Dr.  Meeker,^  the  amounts  paid  in  mail 
subventions  from  1847  to  1858  were  as  follows:  "  Bremen 
Line  (1847-57),  $2,000,000;  Havre  Line  (1852-57), 
$750,000;  Collins  Line  (1850-58),  $4,500,000;  New 
York  to  Aspinwall  (1848-58),  $2,900,000;  Astoria  and 
San  Francisco  to  Panama  (1848-58),  $."5,750,000; 
Charleston  to  Havana  (1848-58),  $500,000.  Total, 
about  $14,500,000." 

From  1858  until  the  close  of  the  Civil  War  the  (-(mi- 
panies  carrying  the  foreign  mails  of  the  United  States 
received  the  ocean  postage  only.     "With  the  restoration  of 

several  in  fact,  before  the  war — hut  they  were  isolated  cases,  and  probably 
in  no  previous  year  was  the  proportion  as  great  as  at  the  time  when  the 
records  begin.  In  1870  this  projiortion  was  three  per  cent,  as  against 
eighty-two  per  cent,  in  England."  (J.  R.  Soley,  p.  603  of  "The  United 
States,"  edited  by  N.  S.  Shaler.) 

^  "  History  of  Shipping  Sul)sidies.''  . 


282     OCEAN   AND   INLAND   WATER  TRANSPORTATION 

peace,  however,  the  advocates  of  a  larger  merchant  ma- 
rine secured  the  passage  of  laws  providing  for  three  mail 
contracts:  one  for  a  service  from  New  York  to  Kio  Ja- 
neiro, another  from  San  Francisco  to  China  and  Jai)an, 
and  a  third  from  San  Francisco  to  Hawaii. 

Tile  contract  for  the  mail  service  between  New  York 
and  Brazil  ex])ired  in  1870;  the  Hawaiian  service  ended  in 
1873;  and  the  contract  for  the  Oriental  service  terminated 
in  1877.  At  that  time  the  opposition  to  subsidies  was  so 
strong  that  no  legislation  providing  for  special  mail  con- 
tracts was  enacted  by  Congress  until  1891,  when  the  law 
now  in  force  was  enacted.  The  provisions  of  that  law 
have  already  been  summarized.  The  report  of  the  Post- 
master-General, issued  in  Decend)er,  1905,  states  that 
there  was  expended  during  the  fiscal  year  ending  June 
30,  1905,  $1,431,G21,  to  maintain  the  seven  contract  serv- 
ices now  being  performed  under  the  law  of  1891. 

The  action  of  Congress  in  1858,  repealing  the  mail 
subsidies  granted  to  the  transatlantic  lines  under  the  Act 
of  1845,  was  in  part  due  to  the  bitter  conflict  between  the 
North  and  South.  Although  the  laws  of  1845  and  1847 
had  been  passed  by  a  Democratic  Congress,  the  Southern 
members  of  Congress,  aided  by  some  representatives  from 
the  agricultural  States  of  the  West,  voted  to  repeal  those 
laws.  The  Congressmen  from  the  South  felt  that  the 
mail  subsidies  were  for  the  benefit  of  Northern  ship- 
owners rather  than  for  the  good  of  the  country  as  a 
whole. 

Whether  the  maintenance  of  a  lil)cral  mail  subsidy 
policy  would  have  kept  our  flag  on  the  North  Atlantic 
steam  service,  is  unccrtniu;  but  it  was  at  least  unfortunate 
that  we  abandoned  tiie  (JovernnuMit  su})port  of  our  steam 
marine  al  a  time  when  it  so  greatly  needed  aid  in  compet- 
ing with  foreign  lines. 

(3)  The  effect  of  the  Civil  AVar  upon  our  merchant 


CAUSES   OF  DECLINE  OF  THE  AMERICAN  MARINE     283 

marine  was  disastrous,  because  the  shock  of  the  war  came 
at  a  critical  epoch  in  the  evohition  of  our  shipping  inter- 
ests; at  a  time  when  our  shipbuilders  and  shipowners 
needed  support  and  assistance  in  tiding  over  the  period  of 
transition  from  sail  to  steam  and  wood  to  iron.  Instead 
of  receiving  aid  to  enable  it  to  meet  foreign  competition, 
our  shipping  was  for  four  years  heavil}-^  taxed,  and  was 
either  idle  for  want  of  traffic  to  carry,  or,  subject  to  cap- 
ture by  Confederate  cruisers,  the  most  destructive  of 
which  were  fitted  out  in  the  shipyards  of  Great  Britain, 
our  most  serious  maritime  rival.  The  registered  tonnage 
under  the  American  flag  in  ISGl  was  2,642,628;  five 
years  later  it  was  only  1,492,926.  About  800,000  tons 
of  American  vessels  were  sold  to  our  foreign  rivals  or 
transferred  to  a  foreign  flag  during  the  war;  Confederate 
cruisers  captured  about  100,000  tons;  over  150,000  tons 
were  lost  at  sea;  nearly  100,000  tons  were  bought  by  the 
United  States  and  converted  into  war  vessels ;  and  the 
average  number  of  ^'essels  was  annually  al»and(iii('<|  nnd 
taken  from  the  register  because  worn  out. 

(4)  It  would  seem  that  our  Government  would  have 
l)een  quick  to  give  assistance  to  our  merchant  marine  at 
the  close  of  the  war.  No  industry  had  suifered  more  dur- 
ing that  conflict;  none  had  greater  need  for,  nor  a  greater 
claim  upon,  Government  support.  Congress  supported 
our  uuniufactures  by  maintaining  a  high  protective  tariff, 
but  failed  to  take  eftective  measures  to  build  up  oui'  mer- 
chant marine.  The  only  assistance  given  to  our  shi[)i)iiig 
by  the  United  States  Government  was  the  legislation 
providing  for  the  mail  services  between  New  York  and 
Brazil,  and  between  California  and  Hawaii,  Japan,  and 
China.  These  subsidies  covered  only  a  few  routes,  and 
those  of  minop  commercial  importance.  Moreover,  the 
assistance  was  withdrawn  at  the  end  of  ten  years. 

Indeed,  Congress  burdened  American  shipping  in  four 
20 


284     OCEAN   AND   INLAND  WATER  TRANSPORTATION 

ways,  none  of  which  was  necessary  or  justifiable:  (a)  By 
the  law  of  February  10,  18GG,  Congress  refused  to  per- 
mit vessels  that  had  been  transferred  from  our  flag  to 
a  foreign  standard  during  the  war  to  be  readmitted  to 
American  registry.  This  law  did  not  benefit  the  ship- 
building industi-y,  and  was  against  the  public  interest, 
because  it  checked  the  increase  in  the  tonnage  of  our  mer- 
chant marine,  (h)  Another  mistake  was  made  by  Con- 
gress in  waiting  until  1808  before  repealing  the  heavy 
revenue  taxes  that  had  been  placed  npon  shipping  during 
the  war  period,  (c)  Shipbuilders  were  not  given  the 
privilege,  until  1872,  of  imjxjrting  duty  free  the  materi- 
als to  be  nsed  in  constructing  and  equipping  wooden  ves- 
sels for  the  foreign  trade;  and  it  was  not  until  1890  that 
Congress  exempted  from  duty  materials  to  be  used  in 
constructing  iron  and  steel  vessels  for  use  in  international 
commerce.  It  is  not  probable  that  our  shipbuilding  and 
maritime  industries  would  have  gained  much  l)y  an 
earlier  exemption  from  duties  on  nMterials  employed  in 
constructing  ships  for  our  foreign  trade,  but  whatever 
effects  the  duties  had  were  against  our  shipping  inter- 
ests, (d)  Liberal  payments  for  carrying  our  ocean  mails 
under  favorable  time  contracts  were  not  provided  for  un- 
til 1891.  A  law  similar  to  the  Act  of  March  3,  1891, 
or  one  broader  in  scope,  might  well  have  been  enacted 
innuediately  after  the  C'ivil  War. 

(5)  The  neglect  of  the  American  navy  for  twenty 
years  after  the  Civil  War  deprived  our  shipbuilding  and 
maritime  interests  of  one  of  the  most  effective  aids  our 
(Jovernment  might  have  rendered.  By  the  close  of  the 
Civil  War  wooden  vessels  had  become  antitpiated  for 
luival  jiurposes,  but  the  United  States  took  no  steps  to 
modernize  its  navy  by  constructing  iron"  steamers.  By 
delaying  the  construction  of  war  ships,  the  United  States 
avoided  the  use  of  iron,  which  had  been  superseded  by 


CAUSES   OF   DECLINE   OF  THE   AMERICAN    MARINE     285 

steel  Avlien  we  began  to  build  up  our  present  navy,  and 
this  has  had  its  advantages;  but  the  postponement  of  our 
naval  programme  from  1865  to  1885,  and  later,  delayed 
the  reorganization  of  our  shipyards  and  the  substitution 
of  plants  for  building  iron  and  steel  steamers,  in  the  i)hK;e 
of  yards  for  constructing  wooden  sailing  vessels. 

(6)  From  the  account  given  below  of  tlir  |i<ilicy  of 
France,  Germany,  the  United  Kingdom,  and  -lapau, 
toward  their  merchant  mariues,  it  will  be  seen  that  those 
countries  gave  their  shipping  interests  much  more  Gov- 
ernment support  than  the  United  States  gave  the  Amer- 
ican merchant  marine.  Without  considering  whether 
the  policy  of  our  foreign  rivals  has  been  wise,  or  whether 
the  United  States  should  have  given  stronger  su])port  to 
our  merchant  marine,  there  can  be  no  question  that  the 
aid  given  to  foreign  shipping  made  competition  on  the 
part  of  our  marine  more  difficult.  In  addition  t(t  other 
handicaps  under  which  our  maritime  interests  labored — 
the  more  advanced  condition  of  the  iron  and  steel  indus- 
tries in  Europe,  the  lead  obtained  by  the  United  King- 
dom  in  the  international  carrying  trade,  etc. — was  added 
the  greater  Government  support  given  to  foreign  ship- 
ping.^ 

(7)  The  most  fundamental  reasons  for  the  decline  of 
the  tonnage  of  our  marine  engaged  in  the  foreign  trade 
were  not  the  political  ones  just  referred  to;  the  chief  ex- 
planation is  to  be  found  in  economic  causes.  During  the 
latter  half  of  the  nineteenth  century  the  energy  of  the 
American  people  and  their  available  capital  found  highly 
profitable  employment  in  settling  the  West,  in  developing 
our  agricultural  and  forest  resources,  in  opening  our 
mines,  and  in  providing  our  wide  territory  with  trans- 
portation facilities.  These  problems  of  internal  develop- 
ment took  the  young  men  of  the  Eastern  States  toward 
the  West  and  away  from  the  sea;  while  our  rapidly  grow- 


286     OCEAN   AND   INLAND   WATER  TRANSPORTATION 

ing  manufacturing  industries  in  the  East  gave  both  na- 
tive Americans  and  the  immigrants  from  abroad  increas- 
ing opportunity  to  secure  remunerative  employment. 

In  a  young  and  ra])idly  growing  country,  such  as  the 
I'nited  States  was  during  that  half  century,  capital  as 
well  as  labor  was  scarce,  and  the  domestic  industries  and 
trade  readily  absorbed  all  the  capital  the  ])<'i)])le  of  the 
United  States  could  command.  ]\Ioreover,  as  Dr.  Crowell 
has  stated,  '^  capital  devoted  to  shipbuilding  for  the  sea 
trade  had  to  earn  retiirns  under  the  stress  of  competition 
in  the  open  world's  markets,  while  the  products  of  capital 
and  labor  within  the  national  limits  were  sold  in  the  na- 
tional market,  within  which  the  prevailing  rate  of  re- 
turns has  always  been  higher  than  in  the  international 
markets." 

There  are  evidences  that  economic  conditions  in 
American  industry  are  becoming  more  favorable  for  the 
investment  of  American  capital  in  the  international  car- 
rying trade.  Capital  has  increased  rapidly  during  the 
past  decade ;  our  manufacturing  and  mining  industries 
and  our  transportation  system  have  reached  a  high  state 
of  development,  and  the  people  of  the  United  States  are 
beginning  to  have  funds  available  for  investment  in  the 
foreign  countries  or  in  ocean  shipping.  Indeed,  a  large 
amount  of  American  money  has  already  been  invested  in 
merchant  shipping  under  the  flags  of  other  countries. 
To  secure  the  investment  of  American  capital  in  our  over- 
sea marine  has  become  a  question  of  making  the  profits 
of  operating  vessels  under  our  registry  and  flag  as  large 
as  those  ^obtainable  from  shipping  under  a  foreign  flag. 
This  is  partly  an  economic  problem,  but  is,  to  some  ex- 
tent at  least,  a  question  to  be  solved  by  legislation.  Be- 
fore considering  what  pleasures  ought  to  be  taken  by 
the  United  States  to  increase  the  orer-sea  merchant  ma- 
rine under  our  flag,  it  will  be  well  to  review  briefly  the 


CAUSES  OF  DECLINE  OF  THE  AMERICAN   MARINE     287 

maritime  policy  prevailing  in  some  of  the  leading  mari- 
time nations  of  the  world. 


KEFERENCES    FOR    FURTHER    READT^'G 

SoLEY,  J.  R.  "The  Maritime  Interests  of  America,"  vol.  I.  of  "The 
United  States  of  America,"  edited  by  N.  S.  Shaler,  1894. 

Crowell,  J.  F.  "The  Shipping  Interest  of  the  United  States,  and 
Its  Relation  to  the  Foregin  Trade."  Monthly  Summary  of 
Commerce  and  Finance,  December,  1900.  United  States 
Bureau  of  Statistics,  Washington,  D.  C. 

"  Development  of  the  American  Merchant  Marine  and  American 
Commerce."  Report  of  the  Merchant  Marine  Commission, 
January,  4,  1905.  Senate  Report  No.  2,755,  58th  Congress, 
3d  Session. 

Marvin,  W.  L.     "The  American  Merchant  Marine."     1902. 

Meeker,  R.     "History  of  Shipping  Subsidies."     1905. 


CHAPTER    XXI 

OOVEENMENT   AID  TO  SHIPPING    AND   NAVIGATION    IN   FRANCE, 
THE    UNITED    KINGDOM,    GERMANY,    AND    JAPAN 

France  has  a  comprehensive  and  liberal  svstem  of 
Government  aid  tb  shipbuilding  and  ocean  navigation. 
In  addition  to  the  construction  bounties  briefly  described 
in  a  ju-evious  chapter,  France  aids  the  shipping  under 
her  flag  with  general  navigation  subventions,  and  with 
generous  payments  for  carrying  her  ocean  mails. 

France,  like  Great  Britain  and  many  other  countries, 
has  always  thought  it  wise  to  give  Government  support 
to  her  citizens  engaged  in  deep-sea  fisheries.  The  act 
now  in  force  for  the  aid  of  French  deep-sea  fisheries  was 
enacted  in  1890,  and  provides  for  an  annual  bounty  of 
15,  30,  or  40  francs  per  man  employed  on  a  fishing  vessel, 
the  rate  of  bounty  depending  upon  the  kind  and  location 
of  the  fisheries  being  aided.  There  is  also  a  bounty  given 
on  the  importation  and  exportation  of  fish.  In  1900  the 
retainers  given  to  the  fishermen  amounted  to  a  total  of 
G35,365  francs,  and  the  bounties  on  the  imports  and  ex- 
ports of  fish  during  that  year  amounted  to  4,913,803 
francs.  These  figures  show  that  France  is  now  gi^^ng 
over  $1,000,000  per  year  to  aid  the  fisheries  carried  on 
under  the  French  flag. 

The  policy  of  granting  construction  and  navigation 
bounties  dates  from  1881.  The  law  of  1881  was  in  op- 
eration twelve  years,  during  which  time  the  French  Gov- 
ernment expended  31,500,000  francs  for  construction 
288 


GOVERNMENT  AID  TO  SHIPPING  AND  NAVIGATION      289 

bounties,  and  89,250,000  francs  for  navioafion  bounties, 
the  average  annual  payment  during-  the  twelve-year 
period  amounting  to  more  than  $2,000,000.  The  results 
of  the  law  of  1881  were,  however,  unsatisfactory,  and  the 
law  of  1893  was  enacted  for  the  purpose  of  broadening 
the  scope  of  Government  aid  to  shi^jping. 

One  important  feature  of  the  law  of  1893  was  the 
heavy  bomity  granted  to  sailing  vessels  as  contrasted  with 
steamers.  The  effect  of  this  was  to  cause  sailing  vessels 
to  be  built  much  more  rapidly  than  steamers.  The  pur- 
pose of  the  discrimination  in  favor  of  the  sailing  vessel 
was  to  enable  the  sailing  vessels  to  compete  successfully 
with  the  steamers.  The  result  of  the  law  was  unfortu- 
nate, because  an  increase  in  steamers  was  more  to  be 
desired  than  an  increase  in  sail  tonnage.  To  overcome 
this  and  other  defects,  and  to  broaden  the  scoj^e  of  the 
hiw,  the  Act  of  1902,  the  one  now  in  force,  was  passed, 
the  main  provisions  of  which  were  as  follows: 

(1)  Foreign-built  ships  were  granted  a  shi])i)iiig 
bounty  called  a  compensation  iVarmnment,  which  was 
])ractically  a  naval  subvention.  Foreign-built  seagoing- 
steamers  of  100  tons  or  more  gross  register,  admitted  to 
French  registry  when  not  more  than  seven  years  old, 
were  entitled  to  receive  a  shipping-  bounty  as  follows  un- 
til the  vessel  reaches  fifteen  years  of  age:  For  each  day 
the  steamer  is  in  commission,  up  to  a  maximum  of  300 
days  per  year,  5  centimes  per  day  for  each  ton  u]i  to 
2,000  tons ;  a  vessel  of  3,000  tons  receives  5  centimes  per 
day  on  the  first  2,000  tons,  and  4  centimes  per  day  on 
the  remaining  1,000  tons;  a  vessel  of  4,000  tons  receives 
5  centimes  per  day  per  ton  on  2,000  tons,  4  centimes  per 
day  on  1,000  tons,  and  3  centimes  per  day  on  1,000  tons; 
the  rate  on  all  tonnage  above  4,000  tons  is  2  centimes 
per  day  per  ton. 

(2)  The   navigation   bounty  granted   to   French-built 


290     OCEAN   AND   INLAND  WATER  TRANSPORTATION 

vessels  of  moi-c  tliiiii  100  tons  p;ro.ss  and  loss  than  15  years 
old,  engaged  in  the  foreign  trade  (navigation  au  long 
coin's),^  ].70  francs  per  ton  per  annnni,  both  for  steam- 
ers and  sailing  vessels,  The  annual  rate  of  decrease  in 
the  honnty  dejx'nded  iij)on  the  size  of  the  ship,  the  niu- 
ferials  of  construction,  and  upon  whether  it  was  a  steamer 
or  sailing  vessel. 

(3)  Vessels  engaged  in  the  international  coasting 
trade  (cabotage  inter  national)  receive  two  thirds  of  the 
shipi^ing  bounty  or  navigation  l)ounty. 

(4)  French-built  vessels  have  the  right  to  choose  for 
each  voyage  whether  to  accept  the  shipping  bounty  or 
the  navigation  bounty. 

(5)  The  bounties  are  granted  upon  a  maximum  ton- 
nage of  500,000  gross  tons  of  steamers,  and  100,000  tons 
gross  of  sailing  vessels,  in  addition  to  the  tonnage  existing 
at  the  time  of  the  passage  of  the  law.  Of  this  additional 
500,000  tons  of  steamers,  not  more  than  two  fifths  shall  be 
foreign-built. 

(6)  In  order  for  sailing  vessels  to  receive  the  benefit 
of  the  law,  they  are  obliged  to  have  cargoes  equal  to  at 
least  two  thirds  of  their  net  tonnage  during  at  least  two 
fifths  of  the  distance  of  the  length  of  their  voyage. 

(7)  Five  ]ier  cent  of  the  bounties  is  to  be  retained 
by  the  Government  for  distribution  among  the  crews, 
and  six  per  cent  of  the  bounties  is  to  be  paid  as  a  con- 
tribution to  the  support  of  the  marine  hospital. 

*  "  Nm'igation  on  long  cours,  referred  to  in  the  various  subsidy  acts 
of  France,  includes  voyages  beyond  the  following  limits:  30°  north 
latitude,  72°  north  latitude,  15°  west  of  Paris  meridian,  and  44°  east  of 
Paris  meridian — that  is,  beyond  ports  of  the  Mediterranean,  North 
Africa,  and  Europe  below  the  arctic  circle.  Cabotage  international 
includes  voyages  ^\nthin  the  above  limits,  between  French  ports,  in- 
cluding those  of  Algeria,  and  foreign  ports;  also  between  foreign  ports. 
Cabotage  francais  includes  the  ports  of  Algeria,  and  recently  those  of 
Madagascar."     See  Meeker,  "History  of  Shipping  Subsidies."'     1902. 


GOVERNMENT  AID  TO  SHIPPING  AND  NAVIGATION     291 

(8)  The  construction  bounties  remained  the  same  as 
under  the  law  of  181)3,  referred  to  in  a  previous 
chapter. 

The  hiw  of  1902  is  much  more  complex  than  previous 
statutes  have  been,  and  will  call  for  an  additional  ex- 
penditure on  the  ])art  of  the  Government. 

The  French  Government  is  now  contributing  about 
$4,000,000  annually  as  construction,  equipment,  and  nav- 
igation bounties.  In  addition  to  this,  she  pays  an  even 
larger  sum  to  a  limited  number  of  companies  for  carrying 
the  mails.  The  postal  subventions  amount  to  over 
$5,000,000,  and  although  there  are  numerous  contracts 
most  of  the  services  under  the  contracts  are  performed  by 
two  companies:  the  Messageries  Maritimes,  to  which 
$2,40(3,508  are  now  paid  annually,  and  the  Compagnie 
Generale  Transatlantique,  the  annual  subventions  to  which 
amount  to  $1,289,240.  The  more  important  of  these  sub- 
ventions are  paid  not  only  for  the  carrying  of  the  mails, 
but  to  secure  a  higher  speed  and  a  more  frequent  service 
than  the  steamship  companies  would  otherwise  provide. 

A  good  example  of  the  purpose  of  the  French  postal 
subvention  is  afforded  by  the  contract  with  the  Compagnie 
Generale  Transatlantique  for  the  mail  service  between 
Havre  and  New  York.  The  present  contract  was  made 
in  1898,  and  became  effective  in  1901,  to  extend  over  a 
period  of  ten  ^^enrs.  The  company  agrees  to  construct 
in  Frcncli  shipyards  3,  and  ultinuitely  4,  22-knot  steamers 
for  this  service.  It  \v;is  also  agreed  by  the  company  that 
if  these  steamers  sliouhl,  in  1905,  prove  to  have  a  speed 
ten  per  cent  less  than  the  speed  of  competing  lines,  the 
company  would,  before  1908,  build  another  steamer  equal 
in  speed  and  design  to  any  competitor.  Under  the  con- 
tract of  1898,  the  speed  of  the  steamers  for  carrying  the 
mails  between  Havre  and  'New  York  was  to  average  17 
knots,  April  1,  1900;  17^  knots,  July  1,  1900;  and  ISf^j 


292     OCEAN   AND   INLAND  WATER  TRANSPORTATION 

knots,  April  1,  1903;  upon  putting  the  fourth  steamer  in 
service  the  average  speed  was  to  be  19  knots.  The  con- 
tract stipuhites  that  if  any  vessel  exceeds  the  annual  av- 
erage speed  it  shall  be  entitled  to  a  speed  suljsidy  of  25 
francs  per  gross  ton  for  every  y-g-  knot  of  excess  speed. 
If  the  average  speed  is  not  attained,  a  penalty  of  25 
francs  for  each  xS"  knot  under  the  required  speed  was  to 
be  exacted.  The  payments  under  the  contracts  are  to  be 
500,000  francs  per  year,  with  a  maximum  additional  speed 
bounty  of  1,680,000  francs  during  the  ten  years. 

The  postal  subventions,  together  with  the  other  large 
bounties  granted  by  France  to  her  shipbuilding  and  ocean 
navigation  interests,  exceed  in  liberality  the  payments 
made  by  any  other  country  for  similar  purposes.  The 
small  results  accomplished  by  this  generous  policy  of 
Government  aid  indicate  the  disadvantageous  conditions 
under  which  shipbuilding  and  the  maritime  industries  of 
France  are  carried  on  in  competition  with  her  great 
rivals,  the  United  Kingdom  and  Germany. 

The  foregoing  detailed  statement  of  the  present  boun- 
ties and  postal  subventions  granted  by  the  French  Gov- 
ernment in  aid  of  shipbuilding  and  shipping  has  been 
presented  because  the  French  system  of  Government  aid 
is  more  comprehensive  than  that  of  other  European  coun- 
tries, and  because  the  French  bounty  system  has  influ- 
enced the  policy  of  Japan,  and  has  attracted  the  favorable 
attention  of  the  advocates  of  Government  aid  to  Amer- 
ican shipbuilding  and  shipping. 

The  Government  aid  to  shipping  given  by  the  Fnited 
Kingdom  consists  of  appropriations  for  maintaining  a 
force  of  naval  reserves,  of  admiralty  subventions  paid  to 
the  o^^^lers  of  certain  vessels,  and  of  mail  subsidies. 

(1)  In  1904—5  the  British  Government  appropriated 
£319,954  (over  $1,500,000)  as  "  pay,  allowances,  and  con- 
tingent expenses  "  of  33,505  officers  and  seamen  serving 


GOVERNMENT   AID  TO   SHIPPING   AND   NAVIGATION     293 

in  inercliaut  and  fishing  vessels;  £70, TU.")  ($350,000)  as 
annual  retainers,  drill  money,  and  lodging  allowances  to 
14,609  men  in  the  Royal  Fleet  Reserve — men  who  drill 
seven  days  a  year  in  the  fleet;  and  £19,000  to  the  6,582 
Royal  Naval  Volunteers,  who  receive  per  diem  and  capi- 
tation allowances.  The  appropriations  of  $2,000,000  an- 
nually, while  intended  primarily  to  provide  a  supply  of 
seamen  upon  whom  the  navy  may  draw  to  obtain  the 
crews  to  man  the  war  vessels,  are  of  much  assistance  to 
the  merchant  marine.  The  naval  retainci's  make  sea  life 
a  more  attractive  calling,  and  enable  vessel  owners  to 
secure  seamen  more  readily  and  probably  at  less  expense. 

(2)  The  admiralty  subventions  paid  in  1904-5  ap- 
plied to  18  fast  steamers,  and  amounted  to  $360,000.  In 
return  for  subventions  paid  during  past  years  there  are 
30  additional  merchant  steamers  held  at  the  disposition 
of  the  Admiralty  without  further  subsidy.  These  48 
merchant  vessels  had  a  gross  register  tonnage  of  375,695 
tons.  The  admiralty  subventions  granted  from  1888  to 
1903  included  35  vessels,  whose  owners  received  $3,500,- 
000  for  maintaining  them  and  certain  other  ships  in  a 
condition  such  that  the  Government  could  readily  con- 
vert them  into  auxiliary  naval  cruisers. 

In  1903  the  British  Government  made  a  special  con- 
tract with  the  Cunard  Company,  whereby  the  Govern- 
ment, in  return  for  a  subvention  of  £150,000  ($729,000) 
a  year  for  ten  years,  and  for  other  assistance,  ac([uired 
the  right  to  purchase  or  lease  any  vessel  owned  by  tlu^ 
company,  and  to  supervise  the  plans  of  all  new  vessels 
with  a  speed  of  17  knots  or  more  which  the  conijiany  may 
construct.  The  company  agreed  to  build,  and  is  now 
building,  two  steamers  that  are  to  have  a  speed  of  24  to 
25  knots  an  hour.  These  steamers  will  cost  about 
£1,300,000  each,  and  the  Government  is  loaning  the  Com- 
pany £2,600,000  ($12,660,000)  at  2f-  per  cent.     The  sub- 


204     OCEAN   AND   INLAND   WATMll  TRANSPORTATION 

vention  of  £150,000  docs  not  include  the  mail  payments 
to  the  company,  which  remain  as  before. 

(3)  The  mail  subsidies  constitute  the  largest  Govern- 
ment aid  given  British  shipping.  Ever  since  the  adop- 
tion of  steam  power  for  the  transoceanic  service.  Great 
Jjritain  has  suj)]5ortcd  the  strongest  and  fastest  lines  of 
steamers  under  the  British  flag  witli  liberal  mail  con- 
tracts. From  the  beginning  the  mail  ])ayments  have  been 
to  some  extent  subsidies  granted  for  three  purjjoses:  (1) 
to  secure  more  frequent  and  faster  mail  services  to  for- 
eign countries,  and  to  the  British  possessions,  than  could 
otherwise  be  secured;  (2)  to  encourage  the  building  of 
merchant  vessels  that  may  be  of  service  to  the  Govern- 
ment in  time  of  war;  and  (3)  to  strengthen  Bi'itish  ship- 
ping, so  as  to  enable  it  to  meet  the  commercial  compe- 
tition of  its  rivals  more  easily.  Great  Britain  has  long 
recognized  that  her  economic  as  well  as  her  military  prog- 
ress is  dependent  upon  success  in  developing  and  main- 
taining a  large  and  prosperous  merchant  marine. 

The  recent  maritime  legislation  of  the  United  King- 
dom has  extended  the  subsidy  principle.  In  order  to  de- 
velop the  fruit  trade  from  Jamaica  to  the  British  Islands, 
the  British  Government  in  1900  made  a  contract  with 
Elder  Dempster  and  Company  for  a  fortnightly  steam- 
ship service  between  Jamaica  and  England.  The  steam- 
ers were  to  have  a  speed  of  15  knots,  to  be  capable  of 
carrying  3,000  tons  of  cargo,  each  ship  to  be  equipped 
for  carrying  20,000  bunches  of  bananas,  and  each  ship 
to  have  accommodations  for  100  first-class  and  50  second- 
class  passengers.  The  company  is  also  required,  during 
the  ten  years  of  the  duration  of  the  contract,  to  purchase 
"  not  less  than  20,000  bunches  of  bananas  for  each  voy- 
age from  Jamaica."  Another  clause  in  the  contract  fixes 
the  maximum  passenger  fares  that  may  be  charged.  The 
company   is,   of  course,   required   to   carry   th(>   mails   be- 


GOVERNMENT  AID  TO  SHIPPING  AND  NAVIGATION     295 

twcen  Great  Britain  and  Jamaica;  but  the  mail  service  is 
not  the  main  feature  of  the  contract. 

The  agreement  of  1903,  above  referred  to,  l)ct\veen 
the  British  Government  and  the  (-unard  Steamshij)  Com- 
pany provided  for  paying  the  company  a  large  subsidy 
(1)  to  enable  it  to  meet  the  competition  of  the  powerful 
German  lines,  and  (2)  to  keej)  the  company  a  strictly 
British  organization  by  inducing  it  not  to  consolidate  with 
the  International  Mercantile  Marine  Company — an  or- 
ganization that  united  several  American  and  Britisli  com- 
panies, was  largely  controlled  by  American  capitalists, 
and  had  a  close  working  agreement  with  the  two  great 
German  lines.  The  British  Government  in  1903  selected 
a  powerful  steamship  company  and  gave  it  strong  support 
when  the  supremacy  of  British  shipping  on  the  Xorth 
Atlantic  was  threatened,  just  as  the  Government  had 
done  with  the  same  company  fifty  years  earlier,  when 
the  Collins  Line — an  American  steamship  company — en- 
dangered the  transatlantic  maritime  leadership  of  the 
United  Kingdom. 

The  payments  annually  received  l)y  the  British  steam- 
ship companies  for  carrying  the  mail  from  the  Ignited 
Kingdom  to  foreign  countries  and  between  the  United 
Kingdom  and  the  colonies  exceed  $5,000,000.  The  Brit- 
ish Government  pays  about  four  fifths  of  this  sum,  and 
the  colonial  governments  the  other  fifth,  the  largest  colo- 
nial payment  being  made  by  the  South  African  colonies, 
from  which  the  Union-Castle  Line  receives  £135,000 
($056,100)  annually.  The  British  colonics  also  support 
British  shipping  by  snl)sidizing  services  between  the  col- 
ony and  foreign  countries.  Canada,  for  example,  in  1901 
offered  to  join  with  ]\Iexico  in  granting  a  yearly  subsidy 
of  $105,000  for  a  monthly  steamship  service  between 
Canadian  and  IMexican  ports,  there  to  be  one  line  on  the 
Atlantic  and  one  on  the  Pacific.     The  same  year  Canada 


296    odEAN  AM)  i.\i,AXi)  \v,\'ri:i{  'ii{A.\sr()irrATi().\ 

joined  with  l''r;in('c  in  snhsidi/iiiii'  ;i  liiu;  of  steamers — 
two  iiiuler  the  liritish  flag  and  two  under  the  French — 
between  Canada  and  France. 

The  German  Empire  aids  its  merchant  marine  by  mail 
su])8idios  to  secure  services  to  Africa,  Australia,  and  the 
Orient,  and  by  preferential  railway  rates  on  goods  ex- 
ported by  the  German  Hnes. 

The  North  German  Lloyd  (Jompany  receives  8,200,- 
000  marks  ($783,020)  for  maintaining  a  service  between 
Germany  and  Eastern  Asia,  including  a  branch  Mediter- 
ranean line,  and  2,300,000  marks  ($549,400)  for  a  serv- 
ice between  Germany  and  Australia.  The  German  P^ast 
Africa  Company  obtains  1,350,000  marks  ($321,300)  for 
conducting  a  service  between  llamljurg  and  Cape  Town 
and  intermediate  ports  on  both  sides  of  Africa.  Two 
other  companies  receive  small  mail  payments — one  com- 
pany receiving  90,000  marks  ($21,420)  for  a  mail  service 
between  Cape  Town  and  Australia,  and  another  company 
10,500  marks  ($2,499)  for  running  a  line  between  Cape 
Town  and  German  Southwest  Africa.  These  mail  con- 
tracts call  for  an  annual  payment  of  7,040,500  marks 
(about  $1,750,000).  The  German  Government  does  not 
pay  stipulated  subsidies  for  its  transatlantic  service,  but 
pays  about  one  third  of  a  million  dollars  annually  to  the 
North  German  Lloyd  and  Hamburg- American  companies 
for  carrying  mail  to  America. 

This  brief  statement  of  the  payments  made  by  the 
German  Government  for  its  ocean-mail  service  shows  that 
the  mail  subsidies  are  confined  to  the  lines  running  to 
Africa,  Australia,  and  the  Orient.  The  main  purpose  of 
the  subsidies  is  to  build  up  the  African  and  Eastern  trade 
of  Germany.  The  policy  of  Germany,  like  that  of  Great 
Britain,  has  been  to  give  most  of  its  assistance  to  the 
strongest  companies,  and  the  policy  has  succeeded  in  ex- 
tend ins;  the  foreign  trade  of  that  countrv. 


GOVERNMENT  AID  TO   SHIPPING  AND  NAVIGATION     297 

The  development  of  the  African  and  Levant  trade  of 
Germany,  and,  in  consequence,  the  growth  of  the  German 
merchant  marine,  have  been  aided  by  the  reduced  freight 
rates  charged  by  the  Government  railways  on  goods  for 
export  by  German  vessels  to  East  Africa  and  to  the  Le- 
vant. Goods  are  shipped  on  through  bills  of  lading  at 
greatly  reduced  rail  rates  from  interior  points  in  Ger- 
many to  East  Africa  and  to  the  countries  adjacent  to  the 
eastern  part  of  the  Mediterranean,  and  to  places  on  the 
Black  Sea.  The  special  rates  granted  on  exports  to  the 
Levant  and  Africa  are  not  the  only  concessions  made  in 
railroad  charges  by  the  German  Governments  to  stim- 
ulate exports  and  imports;  indeed,  the  tariff  on  many 
kinds  of  freight  is  adjusted  by  Prussia  and  the  other 
German  States  so  as  to  favor  foreign  trade. 

Germany  has  made  special  and  very  successful  efforts 
to  create  a  vigorous  shipbuilding  industry.  While  for- 
eign-built ships  may  be  purchased  and  imported  free  of 
duty,  and  are  admitted  to  German  registry,  the  German- 
built  ship  is  favored  in  numerous  ways.  All  foreign  ma- 
terials imported  for  ship  construction  are  exempt  from 
customs  charges;  the  railroad  rates  in  Prussia  on  steel 
and  other  shipbuilding  materials  purchased  in  Germany 
are  made  especially  low;  the  mail  subsidies  granted  by 
the  Imperial  Government  are  limited  to  ships  of  home 
construction;  and  the  extensive  naval  programme  of  Ger- 
many has  been  of  great  assistance  to  the  shi})buikling  in- 
dustry. 

The  results  of  the  shipbuilding  and  navigation  })olicy 
of  Germany  have  been  successful.  (Jerman  shipyards 
are  now  turning  out  about  200,000  tons  of  steel  mer- 
chant vessels  annually,  and  the  tonnage  of  steel  steamers 
in  the  merchant  marine  has  risen  from  less  than  1,000,- 
000  tons  in  1890  to  about  3,000,000  tons  in  1905.  The 
tonnage  of  steel  shi])])ing  has  trebled  in  fifteen  years,  and 


298     OCEAN   AND   INLAND   WATER  TRANSPORTATION 

Loth  tlie  sliipbiiilding  industry  and  tlio  inereliant  marine 
are  now  in  a  condition  of  healthy  development.  More- 
over, these  results  have  been  secured  without  resort  to 
general  navigation  bounties,  and  without  large  payments 
for  mail  subsidies.  Moderate  mail  subventions,  coupled 
with  measures  taken  to  aid  shipbuilding  and  to  extend 
and  enlarge  the  foreign  trade  of  the  country,  have  proven 
to  be  adequate  Government  aid  in  Germany. 

Japan  is  another  country  whose  maritime  policy  mer- 
its consideration.  At  the  close  of  the  war  with  China, 
Japan  decided  to  give  liberal  Government  support  to  the 
development  of  a  merchant  marine,  and  in  189G  she 
adopted  a  policy  of  granting  construction  and  navigation 
bounties.  Her  previous  aid  to  ocean  navigation  had  been 
confined  to  mail  payments,  which  amounted  to  less  than 
$500,000  a  year. 

The  construction  bounty  granted  to  vessels  of  Jap- 
anese construction -w^as  12  yen  ($C5)  per  ton  on  steel  ves- 
sels of  700  to  1,000  tons  register,  and  20  jen  per  ton 
for  larger  vessels.  A  bounty  of  5  yen  per  indicated 
horse  power  is  also  given  to  those  vessels  whose  ma- 
chinery is  made  in.  Japan.  Up  to  1904,  41  steel  steamers, 
of  80,000  gross  tons,  had  been  aided  by  these  construc- 
tion bounties. 

The  navigation  bounties  provided  for  by  the  Japanese 
Act  of  1896  granted  to  steamers  owned  by  Japanese,  and 
operated  under  the  Japanese  flag  between  Japan  and  for- 
eign ports,  a  subsidy  of  25  sen  (about  12^  cents)  per  ton 
per  1,000  miles  run  for  vessels  of  1,000  tons  and  10  knots 
speed.  The  subsidy  increases  with  size  and  speed  of  the 
vessel  up  to  a  maximum  of  60  sen  per  ton  per  1,000  miles 
for  steamers  of  6,000  tons  or  larger  having  a  speed  of  at 
least  17  knots.  Foreign-built  vessels  less  than  five  years 
old,  as  well  as  domestic  ships,  received  the  bounties.  The 
subsidy   is   ])aid   in  full   for   five  years,   after  which   the 


GOVERNMENT  AID  TO   SHIPPING  AND  NAVIGATION    299 

payments  are  rednecd  five  per  cent  each  year,  and  are 
terminated  at  the  end  of  fifteen  years.  The  bonnties 
paid  on  navigation  increased  rapidly,  and  reached  their 
maximum  in  1890,  when  they  amounted  to  $2,020,000; 
after  that  year,  however,  the  navigation  boimties  rapidly 
fell  off,  because  the  Japanese  Government  passed  a  law 
in  1899  which  provided  for  the  substitution  of  a  larger 
number  of  special  subventions  by  contract  with  particular 
companies,  to  take  the  place  of  most  of  the  general  nav- 
igation bounties  obtainable  under  the  law  of  1896.  In 
1902  the  general  navigation  bounties  amounted  to  only 
$160,000. 

The  policy  of  depending  more  largely  upon  special 
subsidies  was  adopted  by  Japan  in  1899,  because  the  nav- 
igation bonnties  of  the  law  of  1896,  although  im})osiug 
a  heavy  drain  u])on  the  treasury  of  the  empire,  were  not 
enabling  the  Japanese  steamship  companies  to  succeed 
satisfactorily  in  competition  with  foreign  lines.  The  pol- 
icy of  making  special  contracts  for  specified  services  by 
selected  routes  has  proven  highly  successful.  Contracts 
have  been  made  with  7  large  steamship  comjianies  for 
services  to  America,  China,  Korea,  Australia,  India,  and 
Europe.  The  contracts  with  these  companies  authorize 
a  maximum  Government  subvention  of  over  $-"5,000,000 
annually.  The  largest  contracts  are  with  the  leading  Jap- 
anese steamship  company,  the  Nippon  Yusen  Kaisha, 
which  is  granted  a  maximum  subvention  of  $1,364,000  a 
year  for  operating  12  fast  steamei's  on  the  European  serv- 
ice, $91,000  for  a  service  to  Bond)ay,  $268,000  for  a  line 
to  Melbourne,  $38;^, 500  for  a  line  from  Hongkong  to 
Seattle  via  Jajjan,  an<l  $280,500  for  mail  services  to 
places  in  China  and  Korea.  The  next  largest  contract  is 
with  the  Toyo  Kisen  Kaisha,  wliiidi  may  receive  a  max- 
imum of  $517,000  for  niuiiing  3  high-class  steamers  be- 
tween H()ngk<»ng  and  San  Fi-ancisco. 
21 


300     OCEAN   AND   INLAND   WATER  TRANSPORTATION 

The  Government  aid  now  given  the  Japanese  mer- 
chant marine  amounts  to  between  $3,000,000  and 
$3,500,000  annually,  most  of  this  relatively  large  sum 
being  paid  in  special  subventions  to  particular  companies 
1()  secure  the  ocean  transjxjrtation  service  of  gTeatest  im- 
portance to  the  commercial  development  of  Japan.  The 
tonnage  under  the  Japanese  flag  is  increasing  rapidly.  In 
1895  the  steam  tonnage  amounted  to  331,374  gToss 
tons;  in  1903,  to  032,742  tons;  moreover,  there  has  been  a 
large  increase  in  the  nuuibei-  and  tonnage  of  large  steel 
steamers  of  over  4,000  uross  tons. 


RKFERENCES  FOR  FURTHER  READING 

Annual  Reports  of  the  Commissioner  of  Navigation.  Report  for 
1894,  Apj)endix  K.  Report  for  1901,  Appendix  G.  Report 
for  1903,  Appendix  P. 

Meeker,  R.     "  History  of  Shipping  Subsidies."  1905. 

"  Development  of  the  American  Merchant  Marine  and  American 
Commerce."  Report  of  the  Merchant  Marine  Commission, 
January  4,  1905.  Senate  Report  No.  2755,  58th  Congress, 
3d  Session. 


CHAPTER    XXII 

TUE    MERCHANT    MAKIAE    QUESTION' 

Bounties  and  subventions  for  tlic  aid  of  navigation 
are  of  two  distinct  kinds:  general  navigation  bounties, 
f^uch  as  France  gives,  and  special  subventions,  such  as 
France,  Germany,  the  United  Kingdom,  and  Ja])an  grant 
to  particular  lines  of  steamers  to  secure  special  serv- 
ices. General  navigation  bounties  are  subsidies,  pure 
and  simple,  while  special  subventions  are  in  part  sub- 
sidies and  in  part  payments  for  special  and  extraordinary 
services  desired  by  the  Government  for  postal,  naval,  and 
commercial  reasons.  The  two  forms  of  Government  aid 
stand  upon  a  different  footing. 

In  favor  of  the  policy  of  granting  general  navigation 
l»ounties,  it  may  be  argued:  (1)  That  since  the  primary 
])urpose  of  the  bounty  is  to  oifset  the  economic  and  other 
disadvantages  to  which  the  shipping  to  be  aided  is  sul_)ject, 
as  compared  with  the  foreign  shipping  with  which  com- 
petition must  be  carried  on,  the  natural  and  surest  way 
to  equalize  conditions  is  to  aid  all  ships  in  the  national 
marine,  and  to  give  them  all  the  same  measure  of  assist- 
ance. (2)  In  this  way,  moreover.  Government  aid  will, 
it  may  be  claimed,  most  surely  contribute  toward  a  well- 
rounded  development  of  shipping — to  an  increase  in 
passenger  steamers,  in  cargo  steamers,  in  sailing  ves- 
sels, and  in  the  fishing  fleet.  (3)  A  third  argument 
for  the   general   navigation   bounty   is  that   it   does   not 

301 


302     OCEAN   AND  INLAND   WATER  TRANSPORTATION 

discriminate;  it  lielp.s  the  weak  as  well  as  the  strong;  it 
treats  all  alike. 

The  Merchant  Marine  Commission  of  1904  recom- 
mended both  a  general  bounty  on  all  shipping  and  special 
subventions  to  specified  lines.  The  general  bounty  sug- 
gested was  "  an  annual  subvention  of  $5  per  gross  regis- 
tered ton  for  every  vessel,  steam  or  sail,  engaged  for 
twelve  months  in  the  foreign  trade  or  deep-sea  fisheries, 
$•1:  for  nine  months,  and  $2.50  for  six  months."  Vessels 
receiving  the  bounty  were  to  be  required  to  carry  the 
mails  free  of  charge,  if  desired,  were  to  have  crews  con- 
taining a  stipulated  proportion  of  naval  volunteers,  were 
to  be  kept  up  to  designated  "  ratings "  (standards  of 
excellence),  were  to  be  held  subject  to  acquisition  by  the 
United  States  for  naval  purposes  at  any  time  upon  pay- 
ment to  the  owners  of  the  "  fair  actual  value,"  and  were 
to  make  all  ordinary  repairs  in  the  United  States.  In  ad- 
vocacy of  this  recommendation  the  commission  stated : 
"  It  is  to  be  noted  that  one  even  rate  of  subvention  of 
$5  per  gross  ton  is  provided  for  all  vessels,  sail  craft  in- 
cluded. This  is  the  fairest  plan  that  possibly  can  be 
framed.  It  is  simple  and  intelligible.  It  is  proof  against 
all  charges  of  favoritism  and  discrimination." 

There  are,  however,  certain  objections  to  general  nav- 
igation bounties  that  weaken  or  overcome  the  arguments 
just  advanced  in  their  favor. 

(1)  In  the  first  place,  general  bounties  on  navigation 
are  subject  to  much  the  same  criticism  that  was  urged 
against  construction  bounties  in  a  former  chapter.  The 
force  of  this  criticism  in  the  case  of  navigation  bounties 
is  weakened  somewhat,  it  is  true,  by  the  fact  that  a  large 
and  prosperous  merchant  marine  is  of  even  gTeater  im- 
portance than  is  a  flourishing  shipbuilding  industry  to 
the  industrial,  commercial,  and  military  progress  of  a 
countrv. 


THE   MERCHANT   MARINE   QUESTION  303 

(2)  A  coiintry,  with  a  relatively  small  shipbuilding 
industry,  that  is  not  able  to  compete  with  foreign  ship- 
yards in  constructing  merchant  vessels  for  the  world 
market,  may  yet  be  able  to  supply  the  domestic  shipping 
interests  with  highly  efficient  vessels  and  also  be  able 
to  construct  war  vessels  of  the  highest  type;  but  no  coun- 
try can  become  and  remain  a  first-class  naval  power 
unless  it  has  a  large  body  of  hardy  seamen  from  which 
to  draw  its  crews  to  man  its  war  vessels;  nor  can  a  great 
commercial  country,  such  as  the  United  States  has  come 
to  be,  hope  to  extend  its  markets  over  the  world  in  suc- 
cessful competition  with  its  powerful  commercial  rivals, 
unless  its  merchants  and  producers  are  served  by  lines  of 
mail  and  freight  steamers  connecting  the  T'l^nited  States 
with  all  the  leading  foreign  centers  of  trade  and  produc- 
tion. This  consideration,  however,  is  rather  an  argument 
in  favor  of  giving  ocean  navigation  vigorous  Government 
support  than  a  justification  of  the  policy  of  general  boun- 
ties on  all  shipping. 

(3)  The  third  argument  in  favor  of  the  general  nav- 
igation bounty  may  be  cited  with  equal  force  against  that 
policy.  From  the  standpoint  of  practical  results,  Gov- 
ernment aid  that  does  not  discrinnnate  between  difForont 
kinds  of  shipphig — that  helps  alike  the  weak  and  the 
strong — may  well  be  criticised.  The  most  certain  nicthixl 
of  increasing  our  merchant  marine  engaged  in  the  inter- 
national trade  is  to  })ick  out  the  stronger  lines  of  vessels 
and  give  them  such  assistance  as  will  enable  them  to  meet 
foreign  competition  successfully  and  to  increase  the  ton- 
nage of  their  fleets  year  by  year.  The  way  to  get  results 
is  to  strengthen  the  strong.  Moreover,  the  weak  arc  ulti- 
mately l)enefitcd  by  this  policy — a  fact  well  shown  l)y 
what  has  taken  place  in  Great  Britain  aiul  Germany, 
where  the  plan  of  aiding  a  limited  number  of  companies 
has  prevailed.      This  fact  is  brought  out  by  the  Merclnint 


304     OCEAN   AND   INLAND   WATER  TRANSPORTATION 

Mariiu^  Comiuis.siori,  tiiid  altliouiili  the  coiiiiiiission  nuikes 
anollier  application  of  the  arguinent,  the  words  of  its 
report  may  well  be  (pioted  in  this  connection: 

It  may  be  said  that  British  "tramps"  and  German  "tramps" 
receive  no  subsidy,  and  that  they  are  numerous.  That  is  true,  but 
indirectly  even  the  "tramps"  are  and  have  been  sharers  in  the 
general  policy  of  national  encouragement.  The  first  British 
"tramps"  years  ago  were  built  in  yards  and  engined  by  machine 
shops  that  had  been  created  and  developed  by  the  parliamentary 
grant  of  subsidies  to  the  Cunard  Line,  the  Peninsular  and  Oriental, 
and  the  Royal  Mail.  These  subsidies  had  an  immediate  and  wide- 
spread effect  upon  the  entire  art  of  steamship  construction  in 
Great  Britain,  and  gave  that  country  at  a  critical  stage  an  over- 
whelming advantage  as  against  America. 

The  same  process  is  now  under  way  in  Germany.  Yards  which 
build  the  subsidized  liners,  and  have  their  materials  delivered  at 
nominal  rates  by  Government  railways,  are  thereby  powerfully 
encouraged  to  build  "tramps"  or  cargo  boats  in  the  intervals  when 
no  liners  are  required.  Moreover,  the  great  foreign  subsidized 
mail  companies  own,  besides  the  ships  that  earn  their  subsidy,  a 
very  large  amount  of  ordinary  commercial  tonnage  which  indi- 
rectly shares  the  benefit  of  the  subventions.  Thus,  when  the 
$1,100,000  subvention  was  recently  awarded  to  the  Cunard  Line, 
that  company  was  encouraged  to  construct  not  only  the  two  great 
24-knot  ships,  but  several  auxiliary  vessels  of  moderate  speed  and 
hea\y  tonnage. 

(4)  The  argument  of  experience  is  against  the  policy 
of  general  navigation  bounties.  The  countries  that  have 
followed  the  policy  of  granting  such  bounties — France, 
Austria-Hungary,  and  Italy— have  had  but  a  small  meas- 
ure of  nuiritime  success  in  comparison  with  Great  Britain 
and  Germany,  whose  aid  has  consisted  mainly  of  special 
subventions.  The  great  maritime  prosperity  of  the  United 
Kingdom  and  Germany  is,  of  course,  due  to  economic 
causes  quite  as  much  as,  or  more  than,  to  their  shipping 
policies;  and  it  is  not  asserted  here  that  other  countries 


THE   MERCHANT   MARINE   QUESTION  305 

would  have  made  large  maritime  progress  had  thej 
adopted  the  policy  of  the  United  Kingdom  or  of  Ger- 
many, nevertheless  the  presumption  of  higher  merit  is  in 
favor  of  the  policy  of  the  countries  that  have  had  the 
greatest  success. 

Japan  is  the  country  that  has  made  the  most  extraor- 
dinary maritime  and  naval  progress  during  the  past 
decade ;  and,  as  is  characteristic  of  Japan  in  many  ways, 
her  shipping  policy  adopted  in  1896  combines  the  impor- 
tant features  of  the  policy  of  the  United  Kingdom,  France, 
and  Germany — construction  and  navigation  bounties,  and 
subventions  to  particular  lines;  but  by  far  the  larger  part 
of  the  aid  given  is  for  subventions  to  special  lines  from 
Jajjan  to  Europe,  to  India,  to  Australia,  to  China,  and 
from  Hongkong  to  Seattle  and  San  Francisco  via  Japan. 

What  maritime  policy  ought  to  be  adopted  by  the 
United  States?  The  Merchant  Marine  Commission  of 
1904  recommended  a  general  bounty  upon  all  shipping, 
and  the  subvention  of  lines  of  steamers  over  10  routes  in 
addition  to  routes  now  covered  by  contracts  made  under 
the  Act  of  March  3,  1891.  The  10  new  routes  would 
connect  the  Atlantic  seaboard  of  the  United  States  with 
South  America  and  South  Africa,  our  Gulf  coast  with 
South  America,  Cuba,  Mexico,  and  Central  America,  and 
our  Pacific  ports  with  the  w'est  coast  of  Mexico,  Central 
America,  and  Panama,  and  with  Hawaii,  Japan,  China, 
and  the  Philippines.  The  adoption  of  the  recommenda- 
tions of  the  Marine  Commission  would  doubtless  bring 
about  a  large  increase  in  our  over-sea  merchant  marine, 
and  cause  an  enlarged  demand  for  shii)s  built  in  American 
yards;  but  if  the  foregoing  analysis  of  the  arguments  for 
and  against  general  navigation  bounties  is  accurate,  the 
wiser  policy  of  the  United  States  would  be  to  devote  all 
its  aid  to  subventions  to  secure  special  services. 

By  picking  out  the  routes  of  most  connnercial  impor- 


306     OCEAN   AND   INLAND   WATER  TRANSPORTATION 

taiice  to  the  United  States  and  l)y  givin^^  enough  aid  to 
secure  and  maintain  efficient  steanishij)  services  over 
those  routes,  our  Govenniient  can  oUtaiu  immediate  and 
definitely  measurable  returns  Utv  the  puhlic  funds  ex- 
pended. By  an  annual  ex])enditure  beginning  with  about 
$5,000,000,  and  rising  within  a  few  years  to  about  double 
that  sum,  the  United  States  c<iiild  biing  alxmt  the  estab- 
lishment of  a  score  of  large  steamshi])  lines,  connecting 
our  ports  with  the  main  sources  from  which  our  imjiortcd 
foods  are  derived,  with  the  countries  from  which  our  in- 
dustries secure  their  foreign  supply  of  materials,  and 
with  the  chief  markets  for  the  sale  of  our  exported  prod- 
ucts. The  steamship  lines  thus  established  would,  it  is 
believed,  grow  stronger  and  increase  the  number  and  ton- 
nage of  their  vessels  with  the  growth  of  American  com- 
merce and  with  the  development  of  economic  conditions 
more  favorable  to  the  growth  of  shipping  under  our  flag. 
In  the  progress  of  our  maritime  interests  more  is  to  be 
hoped  for  from  promoting  the  growth  of  companies  capa- 
ble of  maintaining  well-organized  and  vigorous  services 
than  from  scattering  our  Government  aid  over  our  entire 
registered  tonnage. 

Would  an  annual  expenditure  beginning  Avith  $5,000,- 
000,  and  increasing  to  $10,000,000,  be  unwarrantably 
large  for  subventions  to  secure  an  adequate  ocean  trans- 
portation service  for  our  foreign  mails  and  our  interna- 
tional commerce  ?  In  the  chapter  on  "  The  Passenger  and 
Mail  Services,"  reference  was  made  to  the  report  of  the 
Postmaster-General  for  1905,  w'hich  stated  that  "  it  is 
estimated  that  the  sum  of  $6,219,299.25  was  received  by 
this  department  as  postage  on  articles  exchanged  with  all 
foreign  countries,  and  that  of  that  sum  the  postage  col- 
lected on  the  articles  exchanged  with  countries  other  than 
Canada  and  Mexico  amounted  to  $4,711,215.03."  The 
report  further  states  that  this  sum  "  largely  exceeds  the 


THE   MERCHANT   MARINE   QUESTION  307 

gross  expense  incurred  "  by  the  United  States  for  trans- 
jiorting  onr  foreign  mails  from  the  interior  to  the  sea- 
lioard  and  across  tlie  ocean.  It  would  seem  wise  to  de- 
vote all  (nw  gross  receipts  from  i)ostage  on  foreign  mail 
to  the  development  of  our  merchant  marine.  IF  the  gross 
receipts  from  our  foreign  postage  should  continue  to  in- 
crease at  the  rate  they  have. risen  during  the  past  ten  years 
they  will  amount  to  $10,000,000  a  year  by  10 U. 

The  United  Kingdom's  contracts  for  carrying  her 
ocean  mails  now  call  for  the  yearly  payment  of  about 
$5,000,000,  and  her  annual  a})pro])riations  for  "  naval  re- 
serves "  amount  to  about  $2,000,000.  In  addition  to 
these  annual  payments,  there  are  the  "  admiralty  subven- 
tions "  given  to  Gl  fast  steamers,  owned  by  8  companies. 
These  subventions  from  1888  up  to  1903  amounted  to 
over  $3,500,000,  and  had  materially  lightened  the  cost 
of  constructing  the  ships.  Since  then  the  large  additional 
subvention  of  £130,000  sterling  (nearly  $650,000),  to  be 
paid  annually  for  ten  years  to  the  Cunard  Steamship 
Company,  has  been  made.  The  three  kinds  of  Govern- 
ment aid — mail  payments,  subventions  for  naval  reserves, 
and  admiralty  subventions — taken  together  make  a  total 
fully  as  large  as  the  United  States  would  need  to  spend 
to  carry  out  the  suggestion  just  made  for  assisting  our 
merchant  marine. 

The  Japanese  Government  is  now  paying  about 
$4,000,000  a  year  to  aid  its  shipping  interests,  (iermany 
pays  $2,000,000  a  year  to  German  companies  for  their 
mail  service,  and  aids  them  in  several  other  ways. 
France  pays  out  nearly  $9,000,000  a  year  for  construction 
and  navigation  bounties  and  mail  payments;  but  the  re- 
turns from  Government  aid  have  not  been  so  large  in 
France  as  in  other  countries.  Germany  apparently  ob- 
tained the  best  results  of  any  country  from  the  aid  given 
to  ocean  shipping. 


308     OCEAN  AND   INLAND   WATER  TRANSPORTATION 

The  facts  presented  in  this  chapter  suggest  that  the 
Ignited  States  might  wisely  adopt  the  following  policy 
of  aiding  its  over-sea  merchant  marine: 

(1)  Select  the  oceaii-t  radc  routes  of  most  iiii])ortan('e 
to  the  United  States,  and  secure  hy  liberal  subventions 
the  establishment  on  ea(di  route  of  a  line  of  steamers 
capable  of  perfoi-ming  efficiently  and  adequately  the  serv- 
ices required  for  the  transportation  of  our  foreign  mails 
and  for  the  extension  of  our  international  commerce. 

(2)  The  steamers  on  these  lines  thus  aided  should  be 
required  by  law  to  be  officered  by  An^erican  citizens,  and 
to  have  crews  containing  a  minimum  of  twenty-five  j)er 
cent  at  the  start,  rising  in  five  years  to  a  minimum  of 
fifty  per  cent,  of  American  citizens.  All  American  ves- 
sels engaged  in  our  foreign  trade,  whether  aided  by  a 
subvention  or  not,  and  all  vessels  engaged  in  our  deep-sea 
fisheries,  should  be  given  an  inducement  to  have  officers 
and  crews  eligible  for  enrollment  in  the  naval  reserves  of 
the  United  States.  The  bill  proposed  by  the  Merchant 
Marine  Commission  provided  as  follows  for  the  creation 
of  a  naval  reserve  among  the  rank  and  file  of  merchant 
seamen : 

The  Secretar}^  of  the  Navy  and  the  Secretary  of  Commerce  and 
Labor  shall  cause  to  be  made  an  enrollment  of  officers  and  men 
now  and  hereafter  employed  in  the  merchant  marine  and  deep-sea 
fisheries  of  the  United  States  who  may  be  capable  of  rendering 
service  as  naval  volunteers  in  time  of  war.  No  man  shall  be  thus 
enrolled  who  is  not  a  citizen  of  the  United  States,  or  who  has  not 
declared  his  intention  to  become  a  citizen.  Any  naval  volunteer 
who,  having  declared  his  intention  to  become  a  citizen,  fails  to 
complete  his  naturalization  according  to  the  provisions  of  title 
thirty  of  the  Revised  Statutes,  shall  be  stricken  from  the  rolls. 
These  naval  volunteers  shall  be  enrolled  for  a  period  of  three  years, 
during  which  period  they  shall  be  subject  to  render  ser\'ice  on  call 
of  the  President  in  time  of  war.  They  shall  also  possess  such 
qualifications,  receive   such   instruction,   and  be   subject  to  such 


THE   MERCHANT   M.ARIXE   QUESTION  309 

regulations  as  the  Secretary  of  the  Xavy  may  prescribe.  The 
Secretary  of  the  Treasury  is  hereby  authorized  and  directed,  upon 
proper  audit,  to  pay,  out  of  the  money  in  the  Treasury  not  other- 
wise appropriated,  to  each  officer  or  seaman  thus  enrolled  and  em- 
ployed in  the  foreign  trade  or  deep-sea  fisheries,  as  hereinafter 
provided,  an  annual  retainer  as  follows:  For  each  master  or  chief 
engineer  of  a  vessel  of  the  United  States  of  five  thousand  gross 
tons  or  over,  one  hundred  dollars/  for  each  master  or  chief  engineer 
of  a  vessel  of  the  United  States  of  one  thousand  gross  tons  or  over, 
but  of  less  than  five  thousand  gross  tons,  eighty-five  dollars^  for 
each  master  or  chief  engineer  of  a  vessel  of  the  United  States  under 
one  thousand  gross  tons,  seventy  dollars;! for  each  mate  or  assistant 
engineer  of  a  vessel  of  the  United  States  of  five  thousand  gross 
tons  or  over,  seventy  dollars;  for  each  mate  or  assistant  engineer 
of  a  vessel  of  the  United  States  of  one  thousand  gross  tons  or  over, 
but  less  than  five  thousand  gross  tons,  fifty-five  dollars;  for  each 
mate  or  assistant  engineer  of  a  vessel  of  the  United  States  under 
one  thousand  gi'oss  tons,  forty  dollars;  for  each  seaman,  twenty- 
five  dollars;  for  each  boy,  fifteen  dollars.  Such  retainer  shall  be 
paid  at  the  end  of  each  year  of  service  on  certificate  by  an  officer, 
to  be  designated  by  the  Secretary  of  the  Navy,  that  the  naval  vol- 
unteer has  satisfactorily  comphed  with  the  regulations,  and  on 
certificate  by  the  Commissioner  of  Navigation  that  such  volunteer 
has  served  satisfactorilj'  for  at  least  six  months  of  the  preceding 
twelve  months  on  vessels  of  the  United  States  in  the  foreign  trade 
or  in  the  deep-sea  fisheries. 

The  retainers  that  would  have  been  authorized  bj  this 
bill — ranging  from  $15  a  year  for  a  boy,  and  $25  a  year 
for  a  sailor  or  fireman,  to  $100  a  year  for  the  master  or 
chief  engineer  of  a  large  steamship — Avonld  have  given  a 
strong  inducement  to  the  owners  of  our  merchant  marine 
and  fishing  vessels  to  aid  the  navv  by  creating  a  force 
of  naval  reserves.  The  existence  of  a  na\al  reserve  of 
20,000  men  among  the  officers  and  crews  of  (Uii-  fishing 
fleet  and  merchant  vessels  would  add  greatly  to  the  naval 
strength  of  the  United  States.  A  million  dollars  a  year 
wotild  cover  the  expense  of  paying  retainers  to  a  naval 


310     OCEAN   AND   INLAND   WATIIII  TlJANSrOHTATION 

reserve  of  20,000  men;  aiul  tlie  money  thus  s[)eiit  would 
be  of  much  assistance  to  our  merchant  and  fishing  ma- 
rines. The  United  Kingdom  appropriates  $2,000,000 
annually  for  the  maintenance  of  a  naval  reserve. 

(''))  The  annual  expenditure  for  the  (lovcruuient  sub- 
vcutiou  of  oui'  merchant  shi|)|)iiiii  i'l  the  hkiiiiht  sug- 
gested, and  for  the  creation  and  coiitiiiii;iiicc  of  a  force 
of  TUival  I'eserves,  might  warrantaLly  i"c;icli  a  uiaxiiiniiii 
of  $10,000,000  a  year.  The  expenditure  by  the  Tnitcd 
kStates  Government  during  the  next  twenty  years  of  its 
gross  receipts  from  foreign  ])ostage,  or  a  slightly  larger 
amount,  to  build  up  the  service  of  ocean  transportation 
in  American  vessels,  and  thereby  to  enlarge  our  ship- 
building industry,  would  be  a  wise  policy.  The  steady 
and  sure  development  of  the  foreign  trade  and  the  naval 
strength  of  the  United  States  is  of  such  ])i'ime  iini)ortauce 
to  our  country  that  our  merchant  nuiriue  and  our  ship- 
building industry  may  well  be  given  the  moderate  Gov- 
ernment support  that  is  here  recommended. 

tjeferejstces  for  further  reading 

"Development  of  the  American  Merchant  INIarine  and  American 
Commerce."  Report  of  the  ^lerchant  Marine  Commission, 
January  4,  1905.  Senate  Report  No.  2755,  5Sth  Congress, 
3d  Session. 

See  also  references  to  the  writings  of  Soley,  Crowell,  and  MarAnn, 
at  the  end  of  Chapter  XX. 


ClIAPTEK    XX  ill 

THE    FUTURE    OUTLOOK    FOR    AMERICAN    SHIPBUILDING 
AND    MARITIME    INTERESTS 

AVkat  is  the  outlook  for  the  maritime  industries  of 
the  people  of  the  United  States?  Have  we  the  ability  to 
construct  ships  for  the  international  trade,  and  shall  we 
be  disposed  to  devote  our  capital  and  our  energies  to 
ocean  navigation;  or  are  our  maritime  efforts  to  continue 
to  be,  as  they  now  are,  confined  mainly  to  our  coastwise 
and  near-by  foreign  trade  ? 

Up  to  the  middle  of  the  last  century  ^ve  were  emi- 
nently successful  upon  the  sea ;  whereas  during  the  past 
fifty  years  our  retrogression  has  been  as  marked  as  was 
our  former  progress.  We  have  lost  most  of  our  inter- 
national carrying  trade,  for  reasons  that  have  been  ex- 
plained. The  purpose  of  this  closing  chapter  is  to  inquire 
whether  the  basis  as  well  as  the  superstructure  of  our  mari- 
time transportation  business  has  been  destroyed ;  whether 
present  and  prospective  conditions  indicate  the  growth  or 
decay  of  our  merchant  marine  and  our  shipyards. 

Success  in  building  and  operating  ocean  ships  depends 
upon  four  conditions:  geographic,  economic,  political,  and 
psychological.  In  forming  an  estimate  as  to  the  prospects 
of  our  maritime  interests  it  is  necessary  to  measure  care- 
fully the  strength  and  limitations  of  each  of  the  four  bases 
u]ion  which  we  must  build  for  the  future. 

The  geographic  basis  for  the  building  of  ships  in  tlio 
United  States  and  for  the  development  of  our  merchant 

311 


?y\'2     OCEAN    AM)    IM.A.M)   WATER   TRANSPORTATION 

marine  is  broad  and  strong,  and  in  this  regard  the  United 
States  compares  favorably  with  any  of  its  rivals.  Our 
water  frontage  along  the  Xortiiern  Lakes,  the  Atlantic, 
the  Gulf,  and  the  Pacific,  has  the  great  length  of  7,300 
miles.  Although  a  \'ast  continental  country,  we  have 
water  frontage  on  all  sides — north  and  south,  east  and 
Avest — and  have  ready  connnunication  by  water  with  Can- 
ada, Euro])e,  countries  adjacent  to  the  South  Atlantic, 
and  with  countries  about  the  Xorth  and  South  Pacific. 
The  serious  limitation  now  imposed  by  the  American 
isthmus  upcm  water  connnerce  between  the  Xorth  Atlantic 
and  the  Xorth  Pacific  is  to  be  removed  by  the  Panama 
Canal,  now  being  constructed.  When  the  isthmian  water- 
way is  opened  each  seaboard  of  the  United  States  will 
enjoy  economical  ocean  connection  with  both  Xorth  At- 
lantic and  Pacific  countries.  Our  continental  domain  will 
have  exceptional  facilities  for  ocean  commerce. 

Our  seaboards  and  our  Great  Lake  frontage  are  well 
supplied  wdth  harbors.  The  best  natural  harbors  are  situ- 
ated where  the  economic  development  of  the  country  has 
been  largest,  and  where  the  need  of  good  harbors  is  gi'eat- 
est — along  the  Atlantic  coast,  from  the  mouth  of  the  James 
River  northward ;  along  the  Gulf  coast,  and  on  the  Pacific 
coast  at  the  Golden  Gate ;  in  the  lower  valley  of  the 
Columbia  River,  and  about  the  shores  of  Puget  Sound. 
Good  harbors  also  exist  at  Charleston  and  Savannah,  and, 
where  necessary — as  in  lower  California  and  about  the 
Great  Lakes — artificial  harbors  have  been  or  are  being 
constructed  without  difficulty. 

A  geographic  fact  of  much  importance  to  our  ship- 
building industry  is  that  the  spacious  Chesapeake  and 
Delaware  bays,  the  numerous  other  smaller  bays  and  inlets 
of  our  Xorth  Atlantic  seaboard,  and  the  entire  frontage 
of  our  Xorthern  Lakes,  are  comparatively  close  to  the 
iron  and  coal  resources  of  the  United  States.     The  prox- 


THE   OUTLOOK  FOR  AMERICAN  SHIPBUILDING       313 

imity  of  coal  and  iron  at  Glasgow  and  Xewcastle,  in  Great 
Britain,  has  greatly  aided  those  cities  in  securing  their 
prominence  as  shipbuilding  centers.  The  shipyards  along 
tlie  Delaware  and  Chesapeake  are  not  so  close  as  Glasgow 
and  jSTeweastle  are  to  coal  and  iron,  but  the  costs  of  rail 
transportation  in  the  United  States  have  been  so  reduced 
as  in  great  part  to  overcome  this  slight  handicap  of  the 
Chesapeake  and  Delaware  shipyards.  The  American 
yards,  however,  have  the  advantage  of  abundance  of  natu- 
ral deep-water  frontage,  whereas  deep  water  in  the  Tyne, 
and  especially  in  the  Clyde,  has  lieen  secured  by  extensive 
and  costly  dredging. 

The  acquisition  of  Poi-to  TJico,  the  Philippines,  and 
Hawaii,  has  changed  the  international  positini  of  the 
United  States,  and  addcMJ  anotlier  geographic  factor  fa- 
vorable to  the  development  of  a  larger  American  mercliant 
marine.  Wliile  our  political  and  industrial  interests  were 
concerned  solely  with  the  progress  of  the  United  States  on 
the  continent  of  ISTorth  America,  where  the  different  parts 
of  our  national  domain,  though  of  vast  proportions,  Avere 
everywhere  contiguous,  the  reasons  for  building  up  an 
efficient  merchant  marine  were  less  potent  than  they  have 
become  since  the  United  States  undertook  the  administra- 
tion and  development  of  over-sea  colonies. 

The  increasing  and  unavoidable  responsibilities  of  tlie 
United  States  as  the  leading  nation  upon  the  American 
continents  are  extending  the  range  over  which  our  ]iolitical 
and  economic  influence  must  be  exerted.  This  fact,  quite 
as  much  as  the  possession  of  noncontiguous  colonies,  in- 
creases the  value  of  having  a  domestic  marine  large  enougli 
to  afford  ready  communication  between  the  United  States 
and  the  various  American  countries.  The  widening  s]ihoro 
of  our  international  influence  strengthens  the  geographic 
basis  of  our  merchant  marine  quite  as  much  as  it  necessi- 
tates the  maintenance  of  a  larger  navy. 


311     OCEAN  AND  INLAND  WATER  TRANSPORTATION 

In  general,  the  geograpliic  conditions  affecting  the  ship- 
building and  ocean  navigation  interests  of  the  peojde  of 
the  Uiiitecl  States  are  favorable.  If  the  geographic  factor 
was  alone  determinative,  we  wonld  nnquestionably  en- 
gage largely  in  the  construction  and  navigation  of  deep-sea 
shij)ping;  bnt  there  are  other  factors — economic,  political, 
and  psychological — that  have  checked  our  past  progress  on 
the  high  seas,  and  must  be  reckoned  with  in  the  future. 

In  considering  the  economic  basis  of  shipbuilding  in 
the  United  States  the  fact  must  be  kept  in  mind  that  ship- 
building is  a  manufacturing  industry,  whose  development 
in  any  country  depends  upon  two  prerequisites :  the  exist- 
ence of  material  and  social  conditions  that  make  possible 
the  economical  construction  and  operation  of  ships,  and 
an  increasing  maritime  commerce  on  the  part  of  the  coun- 
try in  question.  Shipbuilders  must  be  able  to  build 
cheaply  and  well,  and  there  must  be  a  steadily  enlarging 
demand  for  the  ships  they  construct. 

The  second  of  these  two  conditions  antecedent  to  suc- 
cess in  the  shipbuilding  industry  obtains  in  the  United 
States,  whose  coastwise  and  international  maritime  com- 
merce has  long  been  increasing,  and  will  continue  to  grow 
with  the  assured  industrial  progress  of  the  country.  There 
is  a  growing  demand  on  the  part  of  the  American  people 
for  ocean  transportation;  there  is  a  large  home  market 
for  American-built  ships  for  both  our  foreigii  and  domes- 
tic commerce,  provided  the  vessels  can  be  constructed  as 
cheaply  in  the  United  States  as  abroad,  and  provided  they 
can  be  operated  under  our  flag  as  economically  as  under  a 
foreign  ensign.  At  the  present  time  the  economic  and 
social  conditions  in  the  United  States  do  nc^t  enable  Ameri- 
cans to  build  and  operate  ocean  vessels  as  economically  as 
our  foreign  rivals  can ;  consequently  we  have  fallen  behind 
in  the  international  carrying  tra(h\  What  prosjiect  have 
we  that  present  economic  and  social  conditions  will  change  ? 


THE   OUTLOOK   FOR    AMERICAN   RIIIPBl^ILDING        315 

In  order  to  achieve  industrial  success  a  country  must 
possess  capital,  and  be  able  to  employ  the  capital  profit- 
ably. Industry,  in  general,  is  limited  by  the  volume  of 
available  capital.  Any  particular  industry  is  limited  both 
by  the  general  supply  of  capital  and  by  the  rehative  profit- 
ableness of  that  line  of  business  as  compared  with  <  it  her 
l)iisiness  activities. 

Capital  is  now  abundant  in  the  United  States,  and  is 
rapidly  accumulating.  We  are  not  only  paying  back  what 
we  borrowed  abroad  a  generation  ago  to  use  in  building 
our  railroads  and  opening  up  our  natural  resources,  but 
we  are  investing  our  surplus  in  foreign  countries  Avhere 
exceptional  profits  are  obtainable.  The  development  of 
shipbuilding  in  the  United  States,  and  the  progress  of  our 
uicrclumt  marine  in  the  future,  will  not  be  liuiited  because 
of  an  inadequate  supply  of  American  capital. 

Whether  we  shall  invest  our  capital  in  shipbuilding 
and  shipping  %vill  depend  upon  the  relative  profits  to  be 
derived  from  those  and  other  industries.  Since  1860,  the 
people  of  the  United  States  have  been  able  to  secure  higher 
returns  by  using  their  capital  in  developing  the  unworked 
natural  resources  of  their  country,  or  in  building  up  domes- 
tic industries  protected  by  tariff  duties  from  foreign  coui- 
petition,  than  they  could  obtain  from  building  ships  and 
engaging  in  ocean  transportation.  Unquestionably  one 
effect  of  our  protective  system  has  been  to  accentuate  the 
investment  of  capital  behind  the  tariff  wgis,  instead  of  in 
industries  such  as  ocean  transportation,  that  cannot  bo 
shielded  from  the  attacks  of  foreign  competitors. 

Tlie  general  economic  progress  of  ther  United  States 
has  doubtless  been  promoted  by  our  tariff  policy;  but  i]\c 
wisdoui  of  continuing  the  policy  unmodified  in  the  future 
is,  at  least,  questionable.  Indeed,  it  seems  that  the  time 
has  come  when  our  natioual  welfare  can  be  enhanced  by 
modifying  our  tariff  system  with  a  view  to  widening  the 
23 


316     OCEAN   AND   INLAND  WATER  TRANSPORTATION 

range  of  onr  industries  and  to  creating  more  favorable 
conditions  for  shipbuilding  and  shipping.  We  should  no 
longer  permit  our  tariff  hiws  to  increase  the  cost  of  ships 
in  the  United  States. 

With  capital  abundant,  and  tariff  restraints  removed 
'from  the  business  of  building  ships,  the  profitableness  and 
progress  of  the  industry  ^vill  depend  upon  the  ability  of 
the  American  builders  to  reduce  labor  costs  and  to  increase 
labor  skill.  The  entire  history  of  American  industry  has 
been  an  unbroken  record  of  success  in  devising  such  ma- 
chinery and  processes  as  were  necessary  to  secure  economi- 
cal results.  It  seems  hardly  probable  that  the  present 
higher  labor  costs  in  American  as  compared  with  foreign 
shipbuilding  will  long  continue.  Unless  our  future  expe- 
rience in  building  ships  is  to  be  unlike  our  past  experience 
in  other  lines  of  heavy  manufacture  we  shall  eventually 
prove  to  be  possessed  of  enough  inventive  ingenuity  and 
of  sufficient  organizing  ability  to  match  our  competitors  in 
economy  of  labor  costs. 

The  handicap  of  higher  labor  costs  is  the  most  serious 
present  obstacle  to  the  growth  of  American  shipbuilding 
and  the  tonnage  of  our  marine  engaged  in  the  foreign 
trade.  In  the  case  of  the  shipbuilding  industry,  the  high 
labor  costs  are  now  due  mainly  to  the  fact  that  we  are 
constructing  a  relatively  small  tonnage,  particularly  of 
passenger  and  cargo  steamers.  However,  the  output  of 
our  yards  is  increasing,  and  as  it  grows  larger  the  labor 
costs  will  decline.  Our  present  labor  disadvantage  will 
naturally  tend  to  become  less.  If  we  can  adopt  measures 
that  will  enlarge  our  marine,  and  thus  cause  a  larger  ton- 
nage of  passenger  and  freight  ships  to  be  Iniilt  in  Ameri- 
can yards,  American  builders  will  doubtless,  in  the  course 
of  a  few  years,  be  able  to  bring  do^vn  labor  expenses  to 
approximately  the  level  prevailing  in  foreign  plants. 
When  the  American  shipbuilding  industry  can  be  organ- 


THE   OUTLOOK   FOR   AMERICAN   SHIPBUILDING    317 

ized  on  the  basis  of  large  scale  production  it  can  and  will 
meet  foreign  competition  successfully. 

The  higher  cost  of  operating  vessels  under  the  xVmeri- 
can  flag  than  under  some  foreign  standard  presents  the 
most  difficult  of  all  the  economic  problems  to  be  solved  in 
making  possible  the  growth  of  the  tonnage  of  our  merchant 
marine.  In  time,  the  differences  in  the  social  and  other 
conditions  aboard  American  and  foreign  vessels  will  doubt- 
less become  slight,  because  the  people  of  all  nations  will 
come  to  require  practically  the  same  treatment  of  the  men 
who  s])end  their  lives  at  sea ;  but  iov  some  years  to  come 
the  higher  standards  of  living,  and  the  higher  wages  i)re- 
vailing  in  the  United  States  as  compared  with  Europe, 
will  keep  the  operating  costs  higher  for  American  than  for 
foreign  ships.  Because  this  is  so,  the  United  States  must, 
at  least  temporarily,  give  liberal  aid  to  our  maritime  in- 
dustry. The  forms  of  State  aid  recommended  in  the  pre- 
vious chapters  were  special  subventions  to  designated  lines 
of  steamers  to  secure  special  and  additional  services,  and 
the  payment  of  retainers  to  those  officers  and  seamen  who 
are  enrolled  as  naval  reserves. 

The  argument  for  Government  aid,  based  upon  the 
economic  handicap  to  which  the  maritime  industries  are 
at  present  subject,  is  not  the  only  argument  that  might  be, 
or  has  been,  advanced ;  there  are  strong  naval  and  com- 
mercial reasons  for  aiding  the  merchant  marine;  but  the 
above  analysis  of  the  economic  status  of  our  maritime  in- 
dustries shows  clearly  that  State  assistance  in  some  form 
is  necessary.  For  reasons  that  have  been  presented  it  is 
believed  that  Avise  methods  of  Government  aid  can  and 
ought  to  be  adopted  by  the  United  States. 

The  political  forces  and  ideals  controlling  the  national 
evolution  of  the  United  States  are  favorable  to  the  de- 
velopment of  American  shipbuilding  and  shipping. 

Fifty  years  ago  sectional  rivalries  and  animosities  di- 


318     OCEAN   AND   INLAND   WATER  TRANSPORTATION 

\i(led  our  count r_y  into  two  nearly  ocjual  iironps  of  people, 
and  caused  tlie  peo})le  in  each  group  to  think  rather  of  I 
their  section  than  of  the  country  as  a  whole.  Fortunately, 
the  unity  of  the  American  ]ieo})le  now  makes  possihle  the 
.enactment  of  legislation  to  promote  national  aims.  Xei- 
ther  sectional  rivalries  nor  i)arty  differences  are  now  apt 
to  defeat  measures  of  truly  national  import. 

Moreover,  our  political  ideals  have  hecomo  not  only 
national,  bnt  also  international.  Tlien;  has  he(;n  a  marked 
enlargement  of  our  ])olitical  lioi'izon  during  the  past  dec- 
ade. The  o])])ortunities  and  obligations  of  the  United 
StJites  are  no  longer  thought  to  be  limited  to  our  home 
territory.  Our  long-cherished  ideals  of  political  isolation 
and  economic  self-sufficiency  ha^•e  been  outgrown.  Wg 
have  come  to  control  the  destinies  of  Latin  America,  and 
are  finding  ourselves  obliged  to  assume  increasing  respon- 
sibilities not  only  in  maintaining  order  among  the  Latin 
republics,  but  also  in  administering  their  finances.  Few 
Americans  welcome  this  rapid  growth  in  our  international 
duties,  and  yet  no  patriotic  citizen  desires  our  country  to 
shrink  from  carrying  its  international  burdens.  The  feel- 
ing of  the  American  people  in  this  regard  was  accurately 
described  by  President  Roosevelt,  in  his  Annual  Message 
to  Congress  in  Decendier,  1905.  "  We  must  ourselves," 
he  said,  '"  in  good  faith  try  to  help  upward  toward  jx^ace 
and  order  those  of  our  sister  repuldics  which  need  such 
help.  Just  as  there  has  been  a  gradual  growth  of  the 
ethical  element  in  the  relations  of  one  individual  to  an- 
other, so  we  are,  even  though  slowly,  more  and  more  com- 
ing to  recognize  the  duty  of  bearing  one  another's  burdens, 
not  only  as  among  individuals,  but  also  as  among  nations." 

Our  international  intlucnce  has  become  broader  than 
our  duties  under  the  ^lonroe  Doctrine.  We  have  become 
potential  in  the  affairs  of  the  East,  and  the  service  of  the 
President  of  the  L'nited  States  in  bringing  about  peace 


THE   OUTLOOK   FOR   AMERICAN   RHIPRTTILDIXO        310 

between  Russia  and  Japan  shows  that  European  countries 
may  in  the  future,  more  than  in  the  past,  desire  the 
friendly  cooperation  of  the  United  States  in  dealing  with 
great  international  problems. 

This  enlargement  of  our  political  influence  is  com- 
pelling us  to  increase  the  size  of  our  navy,  and  both  our 
larger  navy  and  our  increasing  international  responsibili- 
ties emphasize  the  importance  of  having  an  efficient  mer- 
cliaut  marine.  Our  international  relations  and  our  larger 
navy,  as  well  as  our  enormous  and  rapidly  expanding  for- 
eign trade,  argue  in  favor  of  a  larger  tonnage  of  merchant 
shipping,  and  are  likewise  establishing  conditions  which 
render  an  early  develo]unent  of  our  shipbuilding  and 
shipping  more  probable. 

Is  tiiere  the  necessary  psychological  basis  for  the  de- 
velopment of  the  American  maritime  industries  ?  Do  the 
people  of  the  United  States  really  want  to  be  successful 
at  sea  ?  Have  they  the  aptitude  and  the  hardihood  re 
qTiired  for  success  on  the  ocean  ?  Our  history  for  the  two 
hundred  and  fifty  years  from  the  beginning  of  the  seven- 
teenth century  to  the  middle  of  the  nineteenth  century 
gives  a  clear  answer  in  the  affirmative.  The  analysis,  pre- 
sented in  a  previous  chapter  of  this  volume^  of  the  causes 
accounting  for  the  decline,  since  1800,  of  our  merchant 
marine  engaged  in  the  foreign  trade,  shows  that  the  with- 
drawal of  our  capital  from  over-sea  shipping  was  due  to 
llie  exceptional  industrial  opportunities  within  the  United 
States,  and  not  to  any  inaptitude;  on  our  part  for  nuiritime 
enterprises,  or  any  disiucliuatif»n  to  engage  in  seafaring 
pursuits. 

Tlie  fundamental  traits  of  the  American  people  have 
not  changed  during  the  past  hundred  years.  The  blood  of 
our  forefathers  courses  in  our  veins,  and  when  the  eco- 
nomic influences  affecting  our  chances  of  maritime  success 
become  more  favorable,  either  as  the  result  of  a  gradual 


320     OCEAN    AM)   IN  LAN  i)   WATER   TRANSPORTATION 

change  in  the  general  economic  and  social  conditions  pre- 
vailing in  the  United  States,  or  as  the  result  of  legisla- 
tion enacted  to  lessen  or  remove  the  present  liindrances  to 
American  shipping  and  shipbuilding,  we  shall  see  Ameri- 
cans devoting  their  capital,  their  energy,  and  their  skill 
to  the  construction  and  navigation  of  deep-sea  shipping 
with  all  tlic  persistence,  valor,  and  success  that  charac- 
terized the  hardy  masters  and  seamen  who,  fifty  and  a 
hundred  years  ago,  made  the  American  flag  a  familiar 
sight  in  all  the  ports  (»f  the  world. 


BOOK    TWO 

CANAL,  RIVER,  AND  LAKE 
TRANSPORTA  TION 


CHAPTEK    XXIV 

THE    INLAND    "WATERWAYS    IN    THE    UNITED    STATES 

In  a  country  sucli  as  the  United  States,  whose  terri- 
tory is  of  such  continental  proportions,  the  volinne  of  its 
internal  trade  and  transportation  is  far  greater  than  its 
foreign  commerce  and  ocean  transportation.  The  domes- 
tic commerce  of  the  United  States  is  vast  not  only  because 
our  country  is  large,  but  also  for  the  reason  that  the 
products  of  American  industries  consist  mainly  of  bulky 
commodities  which,  because  of  our  territorial  specializa- 
tion in  production,  must  be  transported  long  distances. 
Three  fourths  of  the  iron  ore  mined  in  the  United  States 
- — and  our  country  leads  all  others  in  the  production  of 
iron — comes  from  the  region  about  Lake  Superior,  and 
most  of  the  ore  is  carried  a  thousand  miles  to  be  smelted 
in  Ohio,  Pennsylvania,  and  Xew  York.  The  cotton,  lum- 
ber, and  fruit  of  the  Soutliern  States  are  sliii)ped  North 
in  large  quantities.  The  grain,  flour,  provisions,  and  wool 
from  the  trans-Mississippi  States  are  shipped  1,500  miles 
to  Eastern  markets.  The  lumber,  fruit,  fish,  and  grain 
from  the  Pacific  Coast  States  are  marketed  not  only  in 
the  adjacent  mountain  States,  but  also  in  the  Mississippi 
Valley  and  in  the  East. 

The  home  trade  of  the  United  States  is  couiparable 
with  the  combined  domestic  and  intra-European  commerce 
of  all  the  countries  of  Europe,  rather  than  with  the  inter- 
nal trade  of  any  one  country  of  that  continent.  The 
interstate  commerce  of  such  States  as  Massachusetts,  New 

323 


324     OCEAN   AND   INLAND   WATER  TRANSPORTATION 

York,  Pennsylvania,  Ohio,  and  Illinois  exceeds  the  inter- 
national trade  of  the  smaller  European  countries.  The 
exact  volume  of  our  interstate  and  State  traffic  is  not 
known,  l)iit  it  is  estimated  to  1)C  twenty  times  the  amount 
of  (Mir  hirge  foreign  connnerce. 

The  major  share  of  the  tonnage  of  our  great  internal 
::trade  is  carried  by  the  railroads,  the  mileage  of  which  in 
the  United  States  is  greater  than  the  mileage  of  all  Eu- 
rope ;  but  our  inland  waterways,  especially  the  Great 
LakeSj  perform  an  important  service  as  carriers  of  freight 
"and  regulators  of  railway  charges.  Previous  to  about 
1850  the  industries  and  commerce  of  the  United  States 
depended  mainly  upon  the  waterways  for  long-distance 
transportation,  but  with  the  spread  of  our  railway  net  over 
the  entire  country  the  traffic  of  most  of  the  inland  water- 
ways has  declined.  The  railroads  have  been  able  to  sup- 
ply most  sections  of  the  country  with  adequate  and  suffi- 
ciently economical  transportation  facilities.  Whether, 
with  the  growing  density  of  population  and  with  the  great 
progress  of  our  industries,  there  is  again  arising  a  need 
for  water  transportation  facilities — a  need  for  both  water 
and  rail  transportation — is  a  question  upon  which  the  fol- 
lowing pages  should  throw  some  light. 

Although  the  United  States  includes  an  unbroken  ex- 
j)anse  of  territory  stretching  3,000  miles  from  east  to 
west,  and  half  that  distance  from  north  to  south,  the  coun- 
try possesses  a  large  mileage  of  navigable  waterways.  The 
Great  Lakes  along  our  northern  boundary  constitute  an 
unrivaled  inland  waterway  extending  nearly  halfway 
across  the  continent,  and,  in  the  case  of  Lake  Michigan, 
reaching  several  hundred  miles  into  our  territory.  The 
Mississippi  River  and  its  tributaries  comprise  16,000 
miles  of  navigable  waterways,  the  river  route  from  Pitts- 
biirg  to  Xew  Orleans — the  most-used  waterway  in  the 
Mississippi  basin — being  2,200  miles  in  length.     Many  of 


INLAND   WATERWAYS   IN  THE   UNITED   STATES      325 

the  streams  flowing  into  the  Atlantic  and  Gulf,  and  the 
great  Columbia  River  in  the  Xorthwest,  are  navigable  not 
only  to  the  head  of  their  tidal  reaches,  but  also  in  their 
middle  courses. 

The  inland  waterways  of  the  United  States  may  be 
divided  into  three  classes : 

(1)  Lakes,  of  which  there  are  thousands,  large  and 
small,  within  our  limits,  but  the  only  ones  of  great  com- 
mercial importance  are  the  five  Great  Lakes  along  our 
Canadian  boundary. 

(2)  Ttivers,  which  consist  of  three  natural  groups: 
those  tributary  to  the  Atlantic,  the  Gulf,  and  the  Pacific., 
The  streams  flowing  into  the  Great  Lakes  are  small,  and 
the  outlet  of  the  lakes,  the  noble  St.  Lawrence,  although 
it  flows  along  our  boundary  for  some  distance,  is  a  Ca- 
nadian waterway.  The  rivers  tributary  to  the  ocean  may 
furnish  a  waterway  for  one  or  both  of  two  distinct  kinds 
of  navigation  and  shipping,  for  ocean-going  vessels  and 
for  the  steamboats  and  barges  that  navigate  the  river  only. 
The  deep-water  or  tidal  sections  of  rivers  are  the  harbors 
of  seaports,  or  the  channels  between  the  harbors  and  the 
sea ;  their  place  in  ocean  transportation,  and  the  different 
methods  by  which  they  are  made'  more  serviceable  to  com- 
merce, were  considered  in  Book  One.  It  is  mainly  as 
agencies  for  inland  navigation  that  the  rivers  of  the  United 
States  will  be  considered  in  the  following  pages. 

(3)  Canals,  which  are  the  artificial  waterways  con- 
structed either  to  connect  separated  rivers,  lakes,  or  arms 
of  the  sea,  or  to  lengthen  a  natural  watercourse.  The  most 
important  inland  canals  are  those  connecting  natural  wa- 
terways largely  used  for  commerce.  Canals  connected 
with  natural  inland  waterways  are  of  two  general  types : 
those  so  constructed  as  to  be  used  by  the  vessels  operated 
on  the  waterways  connected,  and  those  usable  only  by 
barges  and  tugs.     Canals  like  those  at  Manchester,  Kiel, 


32G     OCEAN   AND   INLAND   WATER  TRANSPORTATION 

Corinth,  Amsterdam,  and  Suez  are  segments  of  ocean 
routes,  and  need  not  be  considered  in  discussing  inland 
waterways. 

All  of  these  various  classes  of  inland  waterways  exist 
in  the  United  States.  It  will  be  convenient  to  describe 
our  facilities  for  river  navigation  first,  and  then  to  con- 
sider our  lakes  and  canals.  The  description  of  each  must 
needs  be  brief.  The  reader  will  do  well  to  supplement 
this  account  by  studying  a  good  contour  wall  map  or  a 
large  scale  atlas  of  the  United  States. 

The  Atlantic  slope  of  the  United  States  is  drained  by 
numerous  rivers,  and  the  majority  of  them  are  navigable 
for  a  greater  or  less  portion  of  their  courses.  In  New 
England  the  principal  streams  are  the  Penobscot,  Kenne- 
bec, Saco,  Piscataqua,  Merrimac,  Thames,  Connecticut, 
and  Housatonic.  The  rivers  of  New  England,  with  the 
exception  of  the  Connecticut,  are  not  navigable  to  much 
extent  above  their  tidal  sections,  because  of  the  numerous 
waterfalls  in  their  courses.  The  middle  and  upper  reaches 
of  the  streams  can  be  used  to  raft  lumber  and  logs,  and 
can  be  navigated  by  small  boats  to  some  extent,  but  these 
rivers  do  not  furnish  facilities  for  much  systematic  navi- 
gation above  tidewater. 

The  Hudson  River  has  the  largest  traffic  of  any  stream 
tributary  to  the  Atlantic.  The  Atlantic  tides  extend  to 
the  head  of  navigation  of  the  river  at  Troy,  170  miles 
from  the  sea.  The  natural  depth  of  the  river  up  to  Cox- 
sackie,  28  miles  below  Troy,  was  ^'2  feet  or  more;  from 
there  to  Albany  11  feet,  while  above  Albany  the  channel, 
narrow  and  crooked,  decreased  gradually  in  depth  to  a 
minimum  of  4  feet  at  Troy.  In  1899  Congress  authorized 
a  ])roject  for  a  12-foot  channel  from  Troy  to  Coxsackie, 
and  vessels  now  load  to  a  draft  of  10  feet  at  low  water. 
The  Hudson  Kiver  is  navigable  for  several  miles  above 
New  York  City  for  ocean-going  ships,  and  is  navigated 


INLAND  WATERWAYS   IN  THE    UNITED  STATES      327 

by  three  classes  of  vessels :  ocean  ships,  river  steamers,  and 
canal  barges. 

The  Delaware,  Susquehanna,  Potomac,  and  James 
rivers  are  not  navigable  above  tidewater.  Each  of  these 
rivers  crosses  the  "  Fall  Line  "^ — the  line  separating  the 
old  Arcluean  rock  from  rocks  of  the  geological  })('ri(»d 
which  make  np  the  Atlantic  coast  plain — by  a  series  of 
falls  tliat  separate  sharply  the  tidal  sections  of  the  rivers 
from  the  middle  courses  of  the  streams.  The  Fall  T.ino 
in  the  case  of  all  these  rivers  is  over  100  miles  from  the 
sea,  and  the  United  States  Government  has  made  the 
Delaware,  Potomac,  and  James  rivers  navigable  for  large 
oeean-g(ting  vessels.  The  navigation  of  the  Snscpiehanna 
River  ceases  shortly  above  ITavre-de-Grace,  where  the 
river  widens  into  Chesapeake  Bay.  This  bay  has  numer- 
ous affluents  from  Maryland  and  Virginia  that  are  of 
counnercial  importance.  It  will,  however,  suffice  to  men- 
tion only  the  York  Eiver,  Virginia,  which  is  navigable  for 
a  distance  of  41  miles  by  vessels  of  20-feet  draft,  and  the 
Kappahannock  Piver,  which  may  be  navigated  by  vessels 
of  l)-feet  draft  up  to  Fredericksburg,  106  miles  from  the 
mouth  of  the  stream. 

From  the  mouth  of  the  James  Piver,  Virginia,  to  the 
St.  Johns  Piver  in  Florida  is  a  succession  of  rivers,  most 
of  which  have  been  so  improved  as  to  l)o  navigable  for 
from  100  t<»  :100  miles  fr(»m  the  sea.  These  streams  were 
foniKirly  of  greater  value  to  trade  than  they  now  are, 
because  the  railroads  now  carry  much  of  the  traffic  that 
was  tonnei'ly  transportecl  on  tli(!  rivers.  However,  they 
are.  still  of  value  to  commerce,  and  are  regulators  of 
the  railway  rates  to  practically  all  the  important  ])oints 
within  200  miles  of  the  Atlautic  seaboard.  Some  rivers 
are  still  used  by  a  moderately  large  volume  of  traffic, 
notably  the  Pandico,  Tar,  Cape  Fear,  Xeuse,  and  Trent 
rivers  of  Xorth   Carolina.      The  Waccamaw,   Little  and 


328     OCEAN    AND   INLAND   WATER  TRANSPORTATION 

Great  Pedee,  Santee,  Ashley,  and  Kdisto  rivers  of  South 
Carolina  are  of  sufficient  use  to  navigation  to  warrant 
mention.  The  Savannah  lliver,  separating  South  Caro- 
lina and  Georgia,  and  the  Occomce  and  Altamaha  rivers 
of  Georgia,  are  streams  on  which  there  is  regular  traffic. 
'Flic  St.  Johns  River  of  Florida  has  been  made  navigable 
for  ocean  vessels  up  to  Jacksonville,  27^  miles  from  the 
sea.  Above  Jacksonville  the  river  acconnnodates  large 
I'iver  steamers  as  far  as  Pahitka.  Although  Florida  has 
numerous  other  rivers  of  some  use  to  commerce,  mention 
need  be  made  only  of  the  Suwauec,  Ap})alachieola,  and 
Escambia. 

Alabama  has  an  important  river  system  which  reaches 
the  Gulf  via  ]\Iobile  Bay,  The  Tombigbee  and  Alabama 
rivers,  which  unite  to  form  the  Mobile  River,  are  of  such 
commercial  importance  that  the  United  States  Government 
is  improving  and  extending  their  watercourses  with  a  view 
to  giving  a  better  outlet  by  water  to  the  cotton,  lumber, 
coal,  and  iron  of  Alabama. 

The  Mississippi  and  Ohio  rivers,  with  their  numerous 
affluents,  form  a  system  of  inland-river  navigation  rivaled 
only  by  the  great  Amazon  River  system.  The  16,000 
miles  of  navigable  waterways  draining  the  great  central 
portion  of  the  United  States  have  been  of  enormous  im- 
portance to  the  settlement  and  development  of  our  coun- 
try, and  although  our  extensive  and  efficient  system  of 
railways  has  lessened  the  importance  of  river  transporta- 
tion, our  country  possesses  in  this  system  of  inland  water- 
ways a  natural  resource  of  great  value,  destined  to  become 
of  increasing  economic  importance  with  the  future  growth 
in  density  of  population,  and  in  the  diversification  of 
industry  in  the  great  ^Mississippi  Valley  section  of  the 
United  States. 

The  Mississippi  River  is  navigable,  during  ordinary 
stages   of   water,    for   large    river   steamboats    and   large 


INLAND  WATERWAYS   IN  THE  UNITED  STATES      329 

barges  up  to  St.  Louis.  The  head  of  navigation  of  the 
river  is  at  the  Falls  of  St.  Anthony,  at  St.  Paul,  the  use 
made  of  the  river  above  St.  Louis  being  about  equal  to 
that  below  St.  Louis. 

The  Ohio  Eiver  has  a  larger  traffic  than  the  Missis- 
sippi, because  of  the  enormous  tonnage  originating  at  Pitts- 
burg and  along  the  Monongahela  and  Allegheny  rivers 
above  that  city.  The  Great  Kanawha  River  of  West  Vir- 
ginia also  contributes  largely  to  the  traffic  of  the  Ohio, 
and  the  Kentucky  and  Greene  rivers,  as  well  as  the  Cum- 
berland, Tennessee,  and  Wabash,  also  add  to  the  freight 
moved  on  the  Ohio.  The  Missouri  and  Arkansas  rivers, 
formerly  largely  used,  are  now  only  of  moderate  use  to 
commerce ;  the  same  is  true  of  the  Illinois,  and  many  other 
rivers  tributary  to  the  Mississippi. 

California  has  only  one  important  system  of  navigable 
rivers,  and  that  is  the  one  which  discharges  its  waters  into 
San  Francisco  Bay.  The  San  Joaquin,  flowing  north- 
ward in  the  great  valley  of  California,  and  the  Sacramento, 
draining  the  northern  portion  of  the  same  valley,  are 
navigable,  and  form  an  outlet  for  the  products  of  the 
California  Valley. 

The  great  river  of  the  Pacific  coast  is  the  Columbia. 
The  city  of  Portland,  on  the  W^illamette,  110  miles  from 
the  ocean,  has  a  channel  to  the  sea  25  feet  deep,  and  the 
city  is  one  of  the  important  and  rapidly  growing  Pacific 
Ocean  ports.  The  navigation  of  the  Columbia  River, 
until  189G,  was  obstructed  by  the  falls  in  the  river  at  the 
Cascades,  where  the  river  breaks  through  the  ( 'ascade 
range.  By  means  of  a  canal  and  locks  this  obstruction 
to  the  river  was  overcome,  and  then  the  stream  becauie 
navigable  up  to  the  rapids  at  The  Dalles,  about  250  miles 
from  the  sea.  At  ])resent,  cargo  is  transported  around 
these  rapids  in  the  i-i\'ei-  l\v  means  of  a  portage  road.  The 
United  States,  however,  has  recently  begun  the  construe- 


330     OCEAN    AXl)    TXF,A\I)    WATT.I}    TRAXSPOnTATTOX 

tion  of  a  system  of  locks,  which,  with  a  canal  about  5 
miles  in  length,  will  give  an  all-water  route  from  the 
mouth  of  the  Columbia  to  Priest's  Rapids,  in  Washington, 
about  530  miles  from  the  ocean.  The  Snake  lliver  is 
navigable  for  about  200  miles,  and  when  the  present  im- 
provements of  the  (^olumbia  are  completed  the  traffic  of 
southeastei-n  Washington  and  northern  Oregon  will  have 
an  efficient  water  highway  to  and  from  the  sea. 

The  Willamette  liiver  is  navigable  for  about  140 
miles,  and  affords  water  transportation  for  the  important 
valley  which  it  drains  in  western  Oregon.  The  obstruc- 
tion of  the  stream  at  its  falls,  12  miles  south  of  Portland, 
is  overcome  by  a  set  of  locks  now  under  private  owner- 
ship, but  which  the  State  contemplates  taking  over  for 
the  purpose  of  making  the  Willamette  more  serviceable  to 
commerce. 

Puget  Sound,  although  an  arm  of  the  sea,  provides  a 
magnificent  waterway  that  reaches  far  inland.  Several  of 
the  streams  flowing  into  Puget  Sound  are  navigable  for 
some  distance  from  the  Sound. 

This  brief  account  of  the  river  waterways  in  the 
United  States  gives  a  very  general  and  incomplete  picture 
of  the  present  and  possible  facilities  for  inland  naviga- 
tion in  our  country.  One  who  is  not  familiar  wath  the 
number  and  length  of  our  navigable  waterways  will  find 
the  annual  report  of  the  Chief  of  Engineers  of  the  United 
States  Army  a  revelation.  This  thick  volume  discusses 
in  some  detail  each  of  the  navigable  waterways  in  our 
country,  and  the  student  will  find  that  there  are  scores  of 
rivers  of  wdiich  he  may  never  have  heard  that  are  con- 
sidered by  the  United  States  Government  of  such  com- 
mercial importance  as  to  warrant  improvement. 

The  gTeatest  inland  waterway  of  the  United  States, 
and  unquestionably  of  the  world,  is  that  afforded  by  the 
five  Great  Lakes  on  our  northern  boundarv.     Lake  On- 


INLAND  WATERWAYS   IN  THE  UNITED  STATES      331 

tario,  195  miles  in  length;  Lake  Erie,  240  miles  long; 
Lake  Huron,  with  a  length  of  280  miles ;  Lake  Michigan, 
335  miles  in  length,  and  Lake  Superior,  360  miles  long, 
liave  a  total  navigable  length  of  1,410  miles.  The  broad 
St.  Lawrence  River,  which  discharges  more  water  into  the 
sea  than  is  discharged  by  any  other  stream  of  iNTorth 
America,  connects  these  great  lakes  with  the  sea  by  a 
waterway  which  is  available  for  vessels  of  14-feet  draft 
from  Lake  Ontario  to  Montreal.  Below  Montreal  the 
channel  is  deep  enough  to  accommodate  large  ocean  ves- 
sels. x\lthougli  the  St.  Lawrence  lies  mainljr  in  Canada, 
it  forms  the  boundary  between  the  United  States  and 
Canada  for  some  distance,  and  is  serviceable  both  to 
American  and  Canadian  commerce.  This  waterway  of 
the  Great  Lakes  and  the  St.  Lawrence  has  a  total  length 
of  2,000  miles,  and  is  of  incalculable  service  to  the  indus- 
tries and  trade  of  Canada  and  of  the  United  States. 

Before  improvements  were  made,  the  harbors  and  some 
of  the  connecting  channels  of  the  Great  Lakes  were  but  a 
few  feet  in  depth.  In  the  seventies  the  United  States 
Government  deepened  the  harbors  and  connecting  channels 
to  12  feet;  in  the  eighties  the  plan  of  securing  IG  feet  of 
water  was  carried  out ;  and  in  the  nineties  the  present 
channels  of  21  feet  in  depth  were  provided.  ITot  all  of 
the  harbors  of  the  Great  Lakes  will  accommodate  vessels 
of  20-feet  draft,  but  all  connecting  channels  will,  and  the 
commerce  of  the  Great  Lakes  is  carried  in  ships  ch'aw- 
iug  from  15  to  20  feet  of  water.  The  Welland  Canal, 
connecting  Lake  Erie  and  Ontario,  lias  a  depth  of  only 
14  feet,  and  the  same  is  true  of  the  canals  around  the 
rapids  of  the  St.  Lawrence  between  Lake  Ontario  and 
Montreal.  The  (Canadian  Government  will  undoubtedly 
be  obliged,  in  tlie  future,  to  increase  the  dimensions  of  the 
W'clhmd  and  St.  l.,awrence  canals. 

The  rivers  flowing  into  the  Great  Lakes  are  nearly  all 
23 


332     OCEAN   AND   INLAND   WATER  TRANSPORTATION 

sliort,  and  without  commercial  significance  except  as  they 
provide  harbors.  Most  of  the  Great  Lakes  ports — Chi- 
cago, Milwaukee,  Toledo,  and  Cleveland — are  located  at 
the  mouths  of  small  streams,  and  their  harbors  consist 
partly  of  the  dredged  mouths  of  the  rivers,  and  in  part  of 
'small  areas  of  the  lake  protected  from  storms  by  break- 
waters. 

There  are  two  general  classes  of  canals:  those  con- 
structed to  improve  the  navigation  of  a  river  or  lake  route, 
and  those  built  to  connect  separated  waterways.  The 
United  States  at  the  present  time  is  operating  a  large 
number  of  canals  of  the  first  class,  and  is  constructing 
ninnerous  inland  canals  of  this  type  in  connection  with 
the  canalization  of  several  of  our  important  rivers.  Such 
streams  as  the  Columbia,  Ohio,  Warrior,  and  Illinois,  and 
many  others,  are  having  their  navigable  courses  length- 
ened and  improved  by  means  of  locks  and  short  canals. 
Up  to  the  present  time  the  United  States  has  done  but 
little  to  connect  the  separated  systems  of  inland  waterways 
in  the  country  by  means  of  canals  of  the  second  chiss.  Al- 
though frequently  urged  by  diiferent  sections  of  the  coun- 
try to  undertake  the  construction  of  such  canals,  the 
Federal  Government  has  thus  far  left  most  of  that  work 
to  the  States.  The  only  important  canal  of  this  type 
now  being  constructed  by  the  United  States  is  the  Illi- 
nois and  Mississippi,  or  the  Hennepin  Canal,  which  will 
soon  provide  a  7-foot  waterway,  97  mih\s  in  knigth, 
between  the  Mississippi  River  and  Rock  Island,  on  the 
Illinois  River,  at  its  great  bend  just  above  the  town  of 
Hennepin. 

During  the  first  half  of  the  last  century  numerous 
canals  were  constructed  in  the  United  States  by  the  States, 
or  by  corporations,  most  of  whom  received  more  or  less 
public  aid.  According  to  the  census  of  1880,  4,4(58  miles 
of  canals  had  been  constructed  in  the  United  States,  at  a 


INLAND   WATERWAYS   IN   THE   UNITED  STATES      333 

total  cost  of  $214,000,000.  As  early  as  1880,  two  fifths 
of  the  total  mileage  had  been  abandoned,  and  a  consider- 
able portion  of  the  canals  in  operation  in  1880  have  be- 
come of  less  importance  now  than  they  were  then.  The 
canals  now  actually  in  operation  do  not  exceed  2,000  miles 
in  length.  Of  the  many  States  that  constructed  canals, 
New  York,  Maryland,  Ohio,  and  Illinois  are  the  only  ones 
now  owning  and  operating  such  waterways.  The  location 
of  Xew  York  State,  between  the  Great  Lakes  and  the 
Hudson  River  and  Xorth  Atlantic  seaboard,  is  such  that 
the  interest  of  that  State  in  canals  would  naturally  be 
greater  than  any  other  State.  Illinois,  being  located  be- 
tween the  Mississippi  River  and  Lake  Michigan,  is  a 
State  whose  position  would  cause  it  to  be  especially  inter- 
ested in  canal  navigation. 

The  State  of  Ohio  lies  between  the  Ohio  River  and 
the  lakes,  and  until  railroads  demonstrated  their  ability 
to  handle  heavy  traffic  economically  over  the  mountains 
betAveen  the  Ohio  Valley  and  the  seaboard,  it  was  supposed 
that  the  traffic  of  the  Ohio  River  would  be  obliged  to  find 
an  outlet  by  canals  from  the  Ohio  by  way  of  Lake  Erie, 
and  the  Erie  C^qnal,  to  the  seaboard.  The  efficiency  of 
the  trunk  line  railroads  as  carriers  of  heavy  freight  has 
caused  the  canals  extending  north  and  south  across  the 
State  of  Ohio  to  be  chiefly  of  local  importance.  The  canals 
in  Ohio  that  have  not  been  abandoned  are  now  maintained 
and  operated  by  the  State  Government. 

There  are  two  general  canal  routes  across  the  State  of 
Ohio.  The  Ohio  Canal  extends  from  Cleveland,  on  Lake 
Erie,  to  Dresden,  in  tlie  central  part  of  the  State,  from 
which  point  there  are  two  routes,  one  connecting  with  the 
Ohio  River  at  Marietta  via  the  improved  Muskingum 
River,  and  the  other  connecting  with  the  Ohio  at  Ports- 
mouth via  the  Licking  and  Scioto  rivers.  This  latter  route 
also  has  a  branch  canal  down  tlie  Ilockino;  River  \'allev. 


334     OCEAN   AND   INLAND   WATER  TRANSPORTATION 

'I'lie  Ohio  ('anal,  from  ( 'Icvclaiid  to  Dresden,  is  to  be  im- 
proved with  a  view  to  securing  an  etticient  water  ronte  via 
this  canal  and  the  Muskingum  Itiver,  the  improvement  of 
which  is  in  charge  of  the  United  States  Government.  The 
Miami  and  Erie  Canal  connects  Cincinnati  with  Toledo 
via  the  Miami  and  Maiimee  rivers. 

It  seems  probable  that  a  canal  of  large  dimensions 
will  soon  be  constructed  between  Lake  Erie  and  Pittsburg. 
The  enormous  inbound  and  outgoing  traffic  of  the  Pitts- 
burg district  would  provide  such  a  waterway  with  a  heavy 
tonnage.  A  private  company  in  1906  secured  from  Con- 
gress a  charter  to  build  tliis  canal,  a  Federal  charter  being 
required  because  the  waterway  wall  be  located  partly  in 
Pennsylvania  and  partly  in  Ohio. 

The  Erie  Canal,  completed  in  1825,  has  always  been 
the  most  important  canal  in  the  United  States.  Until 
1880  it  was  used  by  a  steadily  increasing  volume  of  traffic, 
and  it  has,  v.ntil  within  a  few  years,  regulated  the  rates 
charged  by  the  railroads  on  freight  between  the  upper 
Mississippi  Valley  and  the  seaboard.  After  neglecting 
the  Erie  Canal  for  nuiuy  years,  the  State  of  Xew  York, 
in  1903,  decided  to  spend  $100,000,000  in  enlarging  and 
in  I  proving  the  Erie,  Oswego,  and  Champlain  canals.  The 
work  of  reconstructing  these  three  canals  is  now  in  prog- 
ress, and  they  are  being  made  waterways  of  12  feet  in 
depth  and  75  feet  in  width  at  the  bottom.  The  locks  are 
to  be  328  feet  long,  Avitli  a  clear  width  of  28  feet  and  a 
minimum  depth  of  11  icct.  After  the  improvements  are 
completed  the  ^STew  York  waterways  will  accommodate 
barges  carrying  1,000  tons,  and  propelled  by  mechanical 
power  at  a  speed  of  6  miles  or  more  an  hour. 

Whether  the  Great  Lakes  and  the  Mississippi  are  to 
be  connected  by  an  efficient  waterway  is  still  an  undecided 
question.  The  old  Illinois  and  ^[ichigan  Canal,  extending 
from  Chicago  to  La  Salle,  on  the  Illinois  River,  is  an  anti- 


336     OCEAN   AND   INLAND   WATER  TRANSPORTATION 

quated  barge  canal  6  feet  in  depth  and  60  feet  wide,  with 
declining  tonnage.  For  some  years  the  systematic  agita- 
tion for  the  enlargement  of  this  canal  by  tlie  United  States 
Government  lias  been  in  progress.  The  United  States  will 
soon  com])lete  the  IIenne})in  Canal;  the  Illinois  River  is 
■l)eing  canalized  by  the  United  States,  and  provided  with 
tli(>  locks  and  cliannel  required  for  a  depth  of  7  feet  at  low 
water,  and  the  city  of  (Miicago  has  connected  Lake  Michi- 
gan with  the  Des  Plaines  River  (an  affluent  of  the  Illinois 
River),  with  a  drainage  canal  20  feet  in  de])tli.  Mean- 
while, the  United  States  Government  is  going  aliea<l  with 
the  improvement  of  the  Mississippi  River  navigation. 
The  carrying  ont  of  these  plans  suggests  that  the  time  can 
hardly  be  far  distant  when  the  people  of  the  United  States 
will  decide  to  connect  our  two  greatest  systems  of  inland 
waterways  with  an  up-to-date  canal  capable  of  accommo- 
dating a  large  tonnage  of  traffic. 

The  construction  of  canals  for  the  purpose  of  connect- 
ing our  main  inland  waterways  with  each  other  and  with 
the  sea  has  received  comparatively  little  attention  in  the 
United  States  since  the  development  of  our  railway  sys- 
tem rendered  unimportant  most  of  the  canals  that  have 
been  constructed  by  the  States.  The  growing  density  of 
population  in  the  United  States  and  the  development  of 
our  industries  are  now  suggesting  the  desirability  of  con- 
structing several  canals  for  the  purpose  of  giving  our  more 
important  industrial  centers  the  advantage  of  both  rail 
and  water  transportation.  European  countries  have  found 
it  to  their  advantage  to  provide  facilities  for  both  rail  and 
water  transportation.  It  seems  probable  that  the  Ameri- 
can people  will,  as  time  goes  on,  connect  the  Great  Lakes 
and  our  largest  rivers  with  some  of  our  industrial  centers 
by  means  of  canals  that  can  accommodate  barges  carrying 
1,000  or  more  tons  of  traffic. 


INLAND  WATERWAYS   IN  THE    UNITED  STATES    337 


REFERENCES    FOR    FURTHER    READING 

Johnson,  E.  R.  "Inland  Waterways,  Their  Relation  to  Trans- 
portation." American  Academy  of  Political  and  Social  Sci- 
ence, September,  1893.     Philadelphia. 

"Annual  Report  of  the  Chief  of  Engineers,  United  States  Army, 
1905." 


CHAPTER    XXV 

THE    IMPKOVEAIENT    AND    MAlNTEiS A.NCK    OF    INEAXD 
WATERWAYS    IN    THE    UNITED    STATES 

The  natural  inland  waterways  in  the  United  States 
are  declared  by  law  to  be  "  navigable  waterways  of  the 
United  States,"  and  are  under  the  control  of  the  Federal 
Government.  The  improvement  of  these  natural  water- 
ways is  now  made  by  Congress,  and  any  State  desiring  to 
improve,  regulate,  or  bridge  a  "'  navigable  waterway '' 
must  submit  its  plans  to  the  Secretary  of  \Yar  and  the 
Chief  of  Engineers  of  the  United  States  Army  for  ap- 
proval, .unless  the  waterway  in  question  lies  wholly  within 
a  single  State,  and  does  not  connect  with  another  river 
that  passes  the  State  boundary.  Likewise,  when  a  State 
constructs  a  canal  that  may  be  used  for  interstate  com- 
merce, the  waterway  becomes  subject  to  Federal  regulation. 

The  Xational  Government  has,  partly  for  constitu- 
tional considerations,  but  principally  for  reasons  of  econ- 
omy and  expediency,  thus  far  left  the  construction  of 
canals  mainly  to  the  States,  but  the  constitutional  reasons 
against  canal  construction  by  Congress  within  a  State  are 
no  longer  urged ;  and  as  there  is  an  increasing  tendency 
on  the  part  of  the  United  States  to  bring  all  interstate 
waterways  under  its  supervision,  we  may  expect  the 
United  States  to  construct  most  of  the  canals  that  will 
eventually  be  built  to  connect  sucli  jiarts  of  our  extensive 
system  of  waterways  as  need  to  be  coordinated  in  order  to 
338 


IMPROVEMENT  AND  MAINTENANCE  OF  WATERWAYS     339 

round  out  our  facilities  for  inland  navigation.  At  the 
present  time  the  State  of  Xew  York  is  reconstructing  its 
canals,  and  the  United  States  is  building  a  canal  in 
Illinois,  the  work  of  canal  building  being  now  carried  on 
both  by  iSTational  and  State  authority. 

The  construction  of  canals  began  in  the  United  States 
at  the  close  of  the  War  of  1812-15,  at  a  time  when  the 
need  for  additional  transportation  facilities  Avas  made 
urgent  by  the  spread  of  population  and  the  development 
of  our  mining  and  agricultural  resources.  The  railroad 
was  not  introduced  until  about  1830,  and  it  was  not  until 
about  1850  that  the  railroad  demonstrated  its  ability  to 
transport  lieavj'  freight  cheaply  enough  to  be  able  to  han- 
dle the  traffic  for  which  the  canals  had  been  and  were 
being  constructed. 

The  early  canals,  those  constructed  between  1815  and 
1835,  were  built  mainly  to  accomplish  two  purposes:  to 
connect  the  anthracite  coal  fields  with  the  seaboard,  and 
to  connect  the  Atlantic  coast  with  the  lakes  and  the  Ohio 
River,  and  thus  with  the  great  Mississippi  Valley.  The 
canals  from  the  anthracite  coal  fields  to  seaboard  points 
included  those  paralleling  the  Lehigh  and  Schuylkill 
rivers  to  their  mouths,  and  the  Delaware  River  from  the 
mouth  of  the  Lehigh  to  Bristol,  Pa. ;  the  Delaware  and 
Hudson  Canal  from  Honesdale,  Pa.,  to  Rondout,  on  the 
Hudson  River ;  the  Morris  Canal  from  Easton,  on  the 
Delaware,  to  Jersey  City;  and  the  Delaware  and  Raritan 
Canal,  from  the  Delaware  River,  at  Bordentown,  across 
New  Jersey  to  l^ew  Brunswick,  on  the  Raritan  River. 
Baltimore  was  reached  from  the  coal  fields  via  the  canals 
down  the  Lehigh,  Schuylkill,  and  Delaware  rivers,  and 
the  canal  connecting  the  Delaware  and  Chesapeake  bays. 
Baltimore  also  had  the  advantage  of  a  water  route  from 
central  Pennsylvania  via  the  Susquehanna  and  Tidewater 
Canal,  which,  however,  was  used  more  generally  for  the 


340     OCEAN   AND   INLAND   WATER  TRANSPORTATION 

shipment  of  general  merchandise  than  for  the  shipment 
of  coal. 

The  canals  to  connect  the  Atlantic  seaboard  Avith  the 
traus-Alleghany  region  were  undertakings  too  large  to  be 
carried  through  bv  corporations.  The  State  of  X(nv  York, 
between  1817  and  1825,  built  the  Erie  Canal  and  numer- 
ous lateral  feeders  to  this  trunk  line  water  route  between 
the  Hudson  River  and  the  Great  Lakes. 

The  activity  of  New  York  caused  Pennsylvania,  in 
1825,  to  begin  the  construction  of  a  rail  and  water  route 
connecting  Philadelphia  with  the  headwaters  of  the  Ohio 
River.  This  route  comprised  a  railroad  from  Philadel- 
})hia  to  the  Susquehanna  River,  a  canal  u\)  the  Susque- 
hanna and  Juniata  valleys  to  Hollidaysburg,  a  portage 
railway  for  the  transportation  of  the  canal  boats  over  the 
mountains  to  Johnstown,  and  a  canal  from  Johnstown  to 
Pittsburg.  This  composite  route  "was  ojiened  in  1834. 
The  State  works  of  Pennsylvania  comprised  altogether 
nearly  600  miles  of  canals. 

The  city  of  Baltimore  and  the  States  of  Virginia  and 
Maryland,  from  the  days  of  George  Washington  on,  had 
been  desirous  of  securing  a  waterway  via  the  Potomac  to 
the  Ohio.  Various  difficulties  kept  the  work  from  making 
much  progress  until  1828,  when  the  Chesapeake  and  Ohio 
Canal  Company,  aided  by  the  State  of  ]\Iary]and,  actively 
began  the  work  of  construction.  It  was  not,  however, 
until  1851  that  the  canal  was  opened  to  navigation  from 
Georgetown  to  Cumberland.  The  State  of  Maryland  did 
not  succeed,  as  did  ]^ew  York  and  Pennsylvania,  in  se- 
curing a  through  route  by  which  traffic  could  be  shipped 
without  breaking  bulk  from  tidewater  to  the  lakes  and 
the  Ohio.  The  Baltimore  and  Ohio  Railroad,  which 
reached  the  Ohio  River  in  1851,  provided  the  first  facility 
for  through  shipment  between  Baltimore  and  the  region 
beyond  the  Alleghanies. 


IMPROVEMENT  AND  MAINTENANCE  OF  WATERWAYS     341 

To  give  an  account  of  the  activity  of  Virginia,  Ken- 
tucky, Ohio,  Indiana,  Michigan,  and  Illinois,  and  the 
various  other  States  that  engaged  in  canal  building,  would 
reciuire  more  space  than  is  available  in  this  volume.  Stu- 
dents of  the  history  of  American  canals  will  find  an 
account  of  that  history  recorded  in  Volume  IV  of  the 
"  Tenth  Census  of  the  United  States."  Most  of  the  States 
engaged  more  or  less  extensively  in  canal  building  be- 
tween 1815  and  1850,  with  results  that  were  usually  un- 
fortunate. Lack  of  experience  in  canal  building  caused 
engineers  to  underestimate  expenses  in  most  instances; 
the  traffic  and  the  revenue  to  be  derived  were  frequently 
overestimated ;  many  canals  were  located  where,  as  sub- 
sequent events  proved,  the  railroad  w'ould  have  provided 
a  better  service  at  less  capital  cost ;  and,  what  was  worst 
of  all,  the  majority  of  the  States  adopted  unsound  finan- 
cial methods  which  could  hardly  have  led  to  other  than 
disastrous  consequences.  Taken  all  in  all,  the  experience 
of  our  States  in  carrying  out  works  of  "  internal  improve- 
ment "  constitutes  one  of  the  most  regrettable  chapters  of 
American  history. 

The  States  having  failed  in  the  majority  of  their  canal 
projects,  sold  or  abandoned  numerous  routes,  and  canal 
building,  where  possible,  was  stopped  by  most  of  the  States 
by  about  1850.  Many  States  substituted  railroad  build- 
ing or  public  aid  to  railroads,  in  place  of  canal  enterprises ; 
and  the  railroads  built  by  private  corporations,  aided  to  a 
large  extent  by  the  States  and  by  Congress,  rapidly  sup- 
plied the  transportation  services  for  which  the  canals  had 
been  desired.  The  original  canals  all  became  technically 
antiquated,  and  only  those  so  located  as  to  be  of  excep- 
tional commercial  importance  were  enlarged  and  improved 
to  meet  the  increasing  requirements  of  commerce.  For 
nearly  fifty  years  canal  development  was  neglected  in  the 
United  States.     However,  the  recent  revival  of  interest  in 


342     OCEAN   AND   INLAND  WATER  TRANSPORTATION 

canals  in  New  York  and  Illinois  suggests  that  the  States 
and  the  United  States  will  in  tlie  future  provide  our 
country  with  such  canals  as  are  needed  to  make  our  natural 
waterways  more  serviceable. 

At  the  same  time  that  the  States  began  to  give  active 
siipport  to  the  improvement  of  rivers  and  the  construc- 
tion of  canals,  efforts  were  made  to  have  the  United  States 
ado])t  a  policy  of  giving  liberal  su])j)ort  to  the  improve- 
ment of  our  inland  waterways.  The  influence  of  Gallatin 
during  defl"ers(jn's  administration,  and  of  Henry  Clay  and 
other  leaders  of  the  Whig  party  in  John  Quincy  Adams's 
administration,  would  doubtless  have  caused  the  United 
States  Government  to  enter  extensively  upon  the  execu- 
tion of  works  of  "  internal  improvement,"  had  it  not  been 
for  the  opposition  of  the  Democratic  party,  which  was  in 
control  of  the  National  Government  most  of  the  time 
from  1830  to  18G0.  Some  aid  was  given  by  the  United 
States  Government  toward  the  improvement  of  rivers  and 
the  construction  of  canals  before  the  Civil  War,  but  the  ac- 
tivity of  Congress  in  the  development  of  inland  water  navi- 
gation was  not  important  until  about  1870,  from  which 
time  the  River  and  Harbor  Bill  in  its  present  form  dates. 

The  items  included  in  the  lliver  and  Harbor  Bill  cover 
appropriations  for  harbors  as  well  as  for  inland  water- 
ways, and  the  bill  makes  appropriations  for  several  hun- 
dred works.  The  United  States  Government  is  now 
spending  $25,000,000  a  year,  on  the  average,  in  the  im- 
provement of  its  harbors  and  inland  waterways.  During 
the  ten  years  ending  in  1900,  the  a])])ropriations  for  this 
purpose  amounted  to  a  total  of  $107,001,217.  Inasmuch 
as  the  total  a])])i'o])riations  for  rivers,  harbors,  and  canals 
from  the  time  of  the  first  act  in  1802  up  to  and  including 
1000  amounted  to  only  $370,411,124,  it  will  be  seen  that 
the  appropriations  now  being  made  far  exceed  those  that 
were  made  in  former  years. 


IMPROVEMENT  AND  MAINTENANCE  OF  WATERWAYS  343 

Although  a  hirge  number  of  streams  oi  minor  impor- 
tance are  being  improved  by  Congress,  most  of  the  money 
is  spent  upon  the  more  important  rivers,  snch  as  the 
Mississippi,  Missouri,  Ohio,  Hudson,  and  Columbia,  and 
upon  the  improvement  of  the  harbors  and  channels  of  the 
Great  Lakes.  These  improvements  are  in  charge  of  the 
Corps  of  Engineers  of  the  United  States  Army,  The  im- 
provement of  the  Mississippi  River  is  a  work  of  such 
magnitude  and  importance  that  it  is  in  charge  of  a  s])ecial 
conmiissiou.  For  a  time  the  Missouri  River  was  in  charge 
of  a  similar  commission.  In  the  case  of  most  enterprises. 
Congress,  after  authorizing  their  execution,  makes  partial 
appropriations  year  by  year  sufficient  only  to  carry  on  the 
work  for  a  year.  Beginning  with  1890,  howevcn-,  C(m- 
gress  wisely  adopted  the  plan  of  placing  the  larger  works, 
such  as  the  improvement  of  the  Mississippi  and  Ohio 
rivers,  and  the  enlargement  and  deepening  of  our  largest 
seaports,  upon  the  ''  continuing  contract "  basis.  In  the 
case  of  the  projects  placed  upon  this  basis.  Congress  gives 
power  to  the  Secretary  of  War  to  make  contracts  for  the 
execution  of  the  entire  project  as  authorized,  and  the  ap- 
propriations for  carrying  on  the  work  are  made  as  re- 
quired. 

REFERENCES    FOR    KURTIIKlt    READING 

For  an  account  of  each  of  the  river  and  harbor  improvements  now 
beinfi  carried  on  by  the  United  States  (lovernnient,  the  student 
is  referred  to  the  current  "Annual  Report  of  th(>  Cliief  of 
Engineers  of  the  United  States  Army." 

A  table  including  every  act  of  Congress,  making  appropriation  for 
the  improvement  of  rivers  and  harbors  may  be  found  in 
Volume  II  of  the  "Index  to  the  Reports  of  the  Chief  of  Ijigi- 
neers,  United  States  Army,  ISOG-IOOO."  (This  compilation 
was  made  by  Lieutenant-Colonel  C.  W.  Raymond,  Corps  of 
Engineers,  United  States  Army.) 


344     OCEAN   AND   INLAND   WATER  TRANSPORTATION 

JoHNSON;  E.  II.  "Inland  Waterways,  Their  Relation  to  Trans- 
portation." American  Academy  of  Political  and  Social  Sci- 
ence.    September,  1893.     riiiladelphia. 

Johnson,  E.  R.  "River  and  Harbor  Bills."  Annals  of  the 
American  Academy  of  Political  and  Social  Science,  vol.  ii,  pp. 
.     782-812.     1892.     Philadelphia. 


CHAPTEK    XXVI 

THE    ORGANIZATION  OF   THE    SERVICE   AND  THE   EQUIPMENT 
EMPLOYED    ON    INLAND    WATERWAYS 

The  efficiency  of  the  transportation  service,  whether 
by  rail  or  upon  the  ocean  or  upon  inland  waterways,  de- 
pends on  the  equipment  used  and  on  the  business  organiza- 
tion by  which  the  service  is  performed.  Canal  transpor- 
tation in  the  United  States  is  relatively  unimportant ;  the 
equipment  employed  is  crude,  and  the  service  is  without 
organization.  The  traffic  on  our  northern  lakes,  on  the 
contrary,  is  of  great  volume,  the  vessels  and  the  terminal 
facilities  are  of  the  highest  technical  efficiency,  and  the 
service  is  conducted  chiefly  by  large  corporations  so  or- 
ganized as  to  secure  the  most  economic  business  results. 
The  equipment  and  management  of  the  river  transporta- 
tion service  are  superior  to  those  prevailing  in  the  canal 
service,  but  do  not  compare  with  the  equipment  and  busi- 
ness methods  that  characterize  transportation  on  the  Great 
Lakes. 

The  canal  barge  in  general  use,  even  on  the  Erie  Canal, 
is  the  old  type  of  wooden  barge  tliat  has  been  in  use  for 
nearly  a  century.  The  maximum  capacity  of  the  Erie 
Canal  barge  is  now  what  it  has  been  for  forty  years  (240 
tuns),  and  the  canals  of  Pennsylvania,  JMaryland,  Ohio, 
and  Illinois  are  of  smaller  dimensions  than  the  Erie  C^anal. 
Steam  towage  is  emjdoyed  to  a  sliglit  extent  on  the  Erie 
Canal,  but  nearly  all  of  the  tonnage  niovcil  (.n  ijiat  and 
the  other  American  canals  is  haiullcMl  by  animal  traction. 

345 


340     OCEAN   AND   INLAND   WATER  TRANSPORTATION 

The  mule  and  the  tovvpath  Lave  not  yet  given  place  to 
mecLanical  power. 

The  enlargement  of  the  Erie  Canal,  now  in  progress, 
will  permit  the  use  of  1,000-ton  barges,  and  will  necessi- 
tate the  use  of  mechanical  traction.  Probably  a  canal  boat 
equipped  with  steam  power,  and  loaded  with  its  own  quota 
of  cargo,  will  tow  two  barges.  By  this  method  one  engine 
will  be  able  to  move  between  2,500  and  3,000  tons  of 
cargo,  or  85,000  to  100,000  bushels  of  wheat,  from  the 
Great  Lakes  to  the  seaboard.  Barges  of  from  1,000  to 
1,500  tons  burden  are  used  on  the  large  rivers  of  Europe, 
and  barges  of  half  that  size  are  connnonly  employed  on 
many  Euro])ean  canals. 

The  canal  trans])ortation  service,  as  now  performed, 
requires  only  a  simple  business  organization.  An  indi- 
vidual or  a  small  partnership  may  own  and  operate  one 
barge,  or  several  barges,  without  investing  much  capital 
or  taking  much  business  risk.  The  traffic  on  the  Erie 
Canal,  and  others  not  under  railroad  control,  is  handled 
by  numerous  small  carriers ;  while  in  the  case  of  many 
of  the  canals  that  have  been  purchased  by  competing  rail- 
roads, the  waterways,  when  not  closed  to  traffic  and  aban- 
doned, are  operated  by  a  centralized  organization  such  as 
a  railroad  company  would  naturally  establish. 

The  present  unorganized  management  of  traffic  will 
hardly  suffice  for  conducting  the  large  transportation  serv- 
ice which  the  improved  Erie  Canal  will  be  capable  of 
performing.  Upon  it,  and  such  other  similar  canals  as 
may  be  opened  in  the  future,  some  more  highly  organized 
and  more  economical  management  of  traffic  than  now  pre- 
vails upon  our  canals  will  be  required. 

Since  the  introduction  of  the  steamboat  on  the  Ohio 
and  ]\lississii)})i  rivers,  during  the  second  decade  of  the 
last  century,  the  traffic  of  those  and  the  other  rivers  of 
the  United  States  has  been  conducted  bv  the  use  of  the 


SERVICE  AND  EQUIPMENT  ON  INLAND  WATERWAYS     347 

typical  flat-bottom,  stern-wheel  steamboat,  the  design  of 
which  has  not  greatly  changed  for  half  a  century.  A 
large  size  Ohio  or  Mississippi  river  steamboat  is  from  200 
to  250  feet  in  length,  about  40  feet  wide,  and  with  a  hold 
8  or  10  feet  in  depth.  The  boats  when  loaded  will  ordi- 
narily draw  from  4  to  6  feet  of  water,  the  depth  of  draft 
depending  upon  the  load,  which  in  turn  is  determined  by 
the  available  depth  of  the  river  channel.  These  flat- 
bottom  river  steamers  will  carry  several  hundred  tons  of 
cargo  on  a  surprising!}-  small  draft  of  water. 

In  times  past,  before  the  universal  use  of  the  railroad 
for  travel,  there  was  a  large  passenger  traffic  upon  the 
rivers  of  the  United  States,  particularly  those  of  the  Ohio 
and  Mississippi  section  of  the  country ;  and  even  now, 
although  most  passengers  travel  by  rail,  river  steamers 
are  used  by  a  relatively  large  number  of  travelers.  It  is 
stated,  for  instance,  that  over  2,500,000  passengers  were 
carried  to  and  from  St.  Louis  by  river  during  the  World's 
Fair  year  of  1904.  While  the  river  traffic  that  year,  as 
in  the  case  of  the  rail  traffic  in  and  out  of  St.  Louis,  was 
unusually  large,  the  steamboat  lines  nevertheless  have  a 
regular  passenger  traffic  of  fair  proportions. 

The  freight  traffic,  on  such  rivers  as  the  Mississippi, 
Ohio,  and  Hudson,  is  handled  in  part  by  regular  lines  of 
steamboats,  and  in  part  by  independent  packets  and  tow- 
boats.  There  are  also  numerous  pleasure  boats  operated 
more  or  less  regularly  during  certain  seasons  of  naviga- 
tion. The  regular  steamboat  lines  carry  both  freight  and 
])assengers.  As  illustrations  of  these  river,  steamboat  com- 
jjanies  tlie  following  may  be  mentioned  :  Tlie  Cincinnati 
and  Pittsburg  Packet  Line,  which  conducts  a  service  llirco 
times  a  week  between  Pittsburg  and  Cincinnati;  llic  ( 'in- 
cinnati,  I'omeroy,  and  (Charleston  Packet  Company,  which 
has  a  weekly  service  between  Cincinnati  ;in<l  Cliarleston ; 
also  a  half-weekly  service  between  Cinciiiiuili  and  Pome- 
24 


348     OCEAN   AND   INLAND   WATER  TRANSPORTATION 

roy,  and  a  daily  service  to  Maysville  and  to  Cliilo ;  the  Dia- 
mond-Jo Line,  which  for  many  years  has  operated  four 
steamers  on  the  Mississippi,  above  St.  Lonis;  the  Lee  Line, 
which  has  a  regular  line  of  four  steamboats  on  the  !^[is- 
sissippi,  below  St.  Louis ;  and  the  Eagle  Packet  Company, 
whose  fleet  of  six  steamboats  is  operated  on  the  Mississippi, 
both  above  and  below  St.  Louis.  Xumerous  other  lines 
might  be  mentioned,  but  these  are  typical  of  the  river 
steamboat  packet  service. 

A  large  share  of  the  traffic  handled  on  the  rivers  of 
the  LTnited  States,  i^articularly  on  the  Ohio  and  Missis- 
sippi rivers,  cojisists  of  rafts  and  of  barge  traffic.  For 
fifty  years  great  quantities  of  lumber  have  annually  been 
taken  from  the  pine  forests  of  northern  ^Minnesota,  Wis- 
consin, and  Michigan,  and  much  of  that  lumber  has  been 
delivered  to  lower  Mississippi  Valley  points  after  having 
been  rafted  to  and  down  the  i\rississippi  River.  The  pine 
forests  of  the  upper  Mississippi  Valley  have  been  largely 
timbered  over,  and  the  amount  of  lumber  rafted  down  the 
Mississippi  and  its  affluents  is  far  less  now  than  formerly. 
The  barge  traffic  down  the  rivers  of  the  Mississippi  Val- 
ley consists  in  part  of  grain  and  building  materials,  but 
most  largely  of  coal,  the  chief  part  of  which  is  taken  from 
the  mines  adjacent  to  the  Monongahela  and  Great  Kana- 
wha rivers.  The  umnner  in  which  this  heavy  coal  traffic 
is  shipped  down  the  Ohio  will  be  described  in  the  follow- 
ing chapter. 

The  coal  traffic  down  the  Ohio  is  handled  mainly  by  a 
few  large  miners  and  dealers  in  coal.  One  corporation, 
for  instance,  the  Monongahela  Consolidated  Coal  and  Coke 
Company,  owns  upward  of  100  towboats  and  3,000  barges. 
These  towboats  and  barges  transport  about  4,000,000  tons 
of  coal  annually.  The  traffic  is  economically  handled,  and 
when  the  project  is  completed  of  giving  the  Ohio  "River 
slack  water  with  a  channel  of  6  to  9  feet  in  depth  at  low 


350     OCEAN   AND  INLAND   WATER  TRANSPORTATION 

stages,  the  tonnage  of  coal  carried  Ijy  Larges  down  tlie 
Ohio  and  Mississi])])i  rivers  will  douhtless  iiiucli  exceed 
its  ])resent  large  amount. 

The  establishment  of  slack-water  navigation  on  the 
Ohio  River  will  also  hasten  the  movement  that  has  begun 
for  the  substitution  of  steel  barges  in  the  place  of  the 
wooden  ones  now  mostly  used.  Two  types  of  wooden 
barges  are  now  used  for  the  shipment  of  coal  from  Pitts- 
burg and  West  Virginia  districts  to  Xew  Orleans.  Abont 
seventy  per  cent  of  the  barges  are  constructed  lightly  and 
cheaply,  and  upon  reaching  Xew  Orleans  are  sold  for 
rough  lumber.  The  other  thirty  per  cent  of  the  wooden 
barges  are  more  strongly  built,  and  when  their  cargoes  are 
discharged  at  the  mouth  of  the  Mississippi  they  are  towed 
back  to  the  mines  for  reloading. 

It  is  not  probable  that  the  present  plan  of  construct- 
ing wooden  barges  or  floats  to  make  only  one  trip  will  be 
long  continued,  as  the  lumber  is  becoming  too  scarce  to 
permit  this  to  be  done.  In  the  future,  reliance  must  be 
upon  the  more  strongly  built  barge  of  wood  or  steel. 
Steel  has  already  begun  to  displace  wood  in  barge  con- 
struction. The  American  Steel  and  Wire  Company,  the 
American  Bridge  Company,  and  other  large  concerns,  are 
putting  steel  barges  into  service  with  satisfactory  results. 
The  steel  barge  is  not  only  stronger  and  more  durable, 
but  will  carry  about  twenty  per  cent  more  cargo  than  a 
wooden  one  will  on  the  same  draft  of  water. 

The  enormous  tonnage  handled  on  the  Great  Lakes  is 
now  transported  mostly  in  steel  steamers  and  large  steel 
barges.  Over  four  fifths  of  the  er.rolled  vessel  tonnage 
of  2,062,147  on  the  Great  Lakes  in  1905  consisted  of 
steamers.  A  large  part  of  the  tonnage  designated  as  sail 
consisted  of  schooner-rigged  steel  barges,  which  are  in- 
variably towed,  and  are  rigged  with  sails  only  to  steady 
them  and  to  assist  somewhat  in  towing. 


SERVICE  AND  EQUIPMENT  ON  INLAND  WATERWAYS     351 

The  size  of  the  Lake  vessel  is  an  indication  of  the 
technical  efficiency  of  the  lake  fleet.  The  average  size  of 
the  steamers  on  the  lakes  in  1905  was  905  ffross  tons, 
which  would  indicate  a  relatively  small  average  size;  hut 
the  average  tonnage  of  the  41  steamers  constrncted  and 
enroll(Ml  in  1905  was  0,809,  the  average  tonnaue  uross  of 


Fast  Plant  in  Operation  at  Conneaut,  Ohio,  fok  HANDUxt:  Oui; 


the  IS  steel  steamers,  exceeding  1,000  tons  gross,  enrolled 
in  1905,  being  5,G41  tons  each. 

Steamers  that  are  600  feet  in  leng*th  over  all,  with  5S- 
feet  beam  and  a  depth  of  32  feet,  are  being  constrncted 
for  delivery  in  1900.  These  enormous  vessels  will  have 
a  carrying  capacity  of  fully  12,000  tons  of  cargo,  and  will 
have  a  gross  tonnage  of  nearly  7,000.  Nine  of  the  IS 
large  ships  launched  in  1905  had  each  an  enrollment  of 
over  6,000  gross  tons.     A  vessel  of  this  size  can  transport 


352     OCEAN   AND   INLAND  WATER  TRANSPORTATION 

from  250,000  to  300,000  tons  of  iron  ore  from  the  head 
of  Lake  Superior  to  the  eastern  end  of  Lake  Erie  during 
the  season  of  navigation.  Such  vessels  rank  in  size  with 
the  large  ocean-freight  steamers. 

In  transporting  iron  ore,  loaded  steamers  sometimes 
are  navigated  singly,  and  sometimes  each  steamer  takes 
two  large  barges  in  tow.     A  single  set  of  engines  may 


Fast  Plant  for  Haxdlixo  Material  at  Fort  .Murris,  New  York, 
FOR  THE  New  York  Central  Railroad  Company. 

transport  over  20,000  tons  of  cargo.     This  is  the  most 
economical  deep-water  transportation  in  the  world. 

The  transportation  equipment  on  the  Great  Lakes  in- 
cludes not  only  the  vessels  for  transferring  the  cargo  from 
port  to  port,  but  also  the  terminal  facilities  for  loading 
and  unloading  the  cargo.  The  ore  is  loaded  into  the  ves- 
sels by  gravity  through  chutes  from  the  ore  docks  located 
at  the  various  shipping  ports  on  Lake  Superior.     The  ore 


SERVICE  AND  EQUIPMENT  ON  INLAND  ^^'ATER^VAYS     353 

is  shot  through  iiiinieroiis  hatches  into  the  vessel,  it  being 
possible  to  load  an  enormous  steamer  in  less  than  an  hour 
from  the  time  the  vessel  reaches  the  dock.  When  the  ship 
reaches  its  terminal  the  ore  is  unloaded  mechanicallv. 
Huge  buckets  carrying  live  tons  or  more  of  ore  are  tilled 
automatically,  and  by  means  of  electric  cranes  and  cauta- 
lever  carriers  are  emptied  either  into  the  cars  standing 
alongside  the  vessel  or  ujDon  ore  dumps  several  hundred 
feet  from  the  steamer.  Vessels  of  the  largest  cajiacity 
may  be  unloaded  in  a  single  day  at  an  expense  of  but  a 
few  cents  per  ton  of  cargo  handled. 

The  traffic  on  the  Great  Lakes  includes  two  general 
classes  of  service :  the  transportation  of  package  freight  or 
general  cargo,  and  the  movement  of  iron  ore,  coal,  grain, 
oil,  and  other  commodities  shipped  as  bulk  cargoes.  The 
iron  ore  is  transported  mainly  by  the  mine  owners.  The 
United  States  Steel  Corporation  alone  had,  in  1004,  a 
fleet  of  70  steamers  and  42  barges.  The  Standard  Oil 
Company  uses  its  own  steamers,  having  several  tank  ves- 
sels in  service. 

The  package  freight  or  general  cargo  is  handled  by 
line  steamers,  most  of  the  vessel  lines  on  the  Great  Lakes 
being  owned  by  the  trunk  line  and  transcontinental  rail- 
roads. The  following  list  of  the  railroad  steamship  lines 
on  the  Great  Lakes  will  show  the  extent  to  which  the  gen- 
eral cargo  traffic  is  controlled  by  the  railroad  lines: 

LAKE  LINES  CONTROLLED  BY  RAILROAD  COMPANIES 

Name  of  the  vessel  line.  Railroad  owner. 

L  Western  Transit  Company New  York  Central  it  Hud- 
son River  Railroad. 

2.  Rutland  Transit  Company Owned  through  the  Rutland 

Railroad     by    the     New 
York  Central. 

3.  Canada  Atlantic  Transit  Company Grand  Trunk  Railway. 

4.  Union  Steamboat  Company Erie  Railroad. 


354     OCEAN   AND   INLAND  WATER  TRANSPORTATION 

Name  of  the  vessel  line.  Railroad  owner. 

5.  Lehigh  Valley  Transportation  C'oinpaiiy.Leliigh  Valley  Railroad. 

6.  Mutual  Transit  Company Jointly  hy  the  lOric;,  Lehigh 

Valh-y,  Delaware,  Lacka- 
wanna &  Western;  and 
the  New  York  Central. 

7.  Lackawanna  Transi)ortati(iM  i>iiie Delaware,    Lackawanna    & 

\\'e.st(  rn  Uaiiroad. 

8.  Erie  &  Western  Transportation  Com- 

pany (Anchor  Jjne) Peimsylvania  Hailroad. 

9.  Baltimore  &  Ohio  Lake  Line Jialtiinore&  Ohio  Railroad. 

10.  Great  Northern  Steamship  Company.  .  .(Ireat  Northern  Railway. 


The  largc^st  lines  on  tlic  (Irciit  Lakes  are  the  Western 
Transit  Company,  owned  by  the  Xew  York  Central  Kail- 
road,  and  the  Erie  and  Western  Transportation  Company 
(Anchor  Line),  owned  by  the  Pennsylvania  Railroad 
Company.  The  Erie  and  Western  Transportation  Com- 
pany is  a  typical  railroad  line.  It  was  formerly  owned 
by  the  Empire  Fast  Freii>ht  Line,  which  became  the 
property  of  the  Pennsylvania  Railroad  when  tliat  corpo- 
ration took  over  the  Empire  Line.  Under  tlie  present 
name,  the  Anchor  Line,  14  vessels  are  operated  between 
Lake  Erie  points  (Buffalo,  Cleveland,  Erie,  and  Detroit) 
and  Lake  Michigan  and  Lak(>  Su])erior  ])oints,  the  western 
termini  being  Duhith  and  Chicago.  The  traffic  westbound 
comprises  all  kinds  of  general  jiackage  freight,  the  cargo 
east  bound  consisting  mainly  of  flour  and  grain  products, 
with  a  small  amount  of  copper.  Four  of  the  14  vessels 
carry  passengers,  and  have  regular  sailings  between  Buf- 
falo and  Duluth. 

The  organization  of  the  lake  transportation  service 
comprises : 

(1)  The  operation  of  ships  by  individual  o'\\Tiers  or 
by  small  companies.  Formerly  most  of  the  lake  business 
was  handled  in  small  vessels  owned  by  persons  and  com- 
panies engaged  solely  as  carriers  on  the  lakes.     During 


1 


356     OCEAN   AxND   INLAND   WATER  TRANSPORTATION 

recent  years,  however,  the  individuals  and  small  com- 
panies have  become  an  unimportant  factor  in  lake  trans- 
portation. 

(2)  Lines  of  vessels  owned  and  operated  by  railroail 
companies.  The  railroads  connecting  the  Atlantic  sea- 
board with  the  Great  Lakes  have  established  lines  of  ves- 
sels on  the  lakes  both  to  enable  them  to  ship  from  Eastern 
points  by  rail  and  water  route  to  the  middle  West,  and  to 
enable  them  to  secure  for  their  railroad  lines  in  the  East 
as  large  a  share  as  possible  of  the  traffic  originating  about 
and  beyond  Lakes  Superior  and  Michigan.  The  transcon- 
tinental railroads  having  lake  lines  have  established  such 
lines  in  order  to  secure  a  greater  volume  of  the  through 
passenger  and  freight  traffic  between  the  Eastern  and 
Western  sections  of  the  United  States. 

(3)  Lines  of  vessels  controlled  by  large  mining  and 
manufacturing  corporations.  The  United  States  Steel 
Corporation,  and  other  big  manufacturing  concerns,  have 
found  it  economical  to  control  all  the  processes  of  pro- 
duction, from  the  extraction  of  the  raw  material  from  the 
ground  to  the  completion  of  the  finished  manufactured 
product.  The  Standard  Oil  Company  carries  this  process 
so  far  as  to  deliver  manufactured  oil  to  consumers  in  all 
parts  of  the  world. 

The  tendency  toward  consolidation  of  ownership  and 
management  has  been  very  marked  in  the  organization  of 
the  lake  transportation  service.  The  former  competition 
of  lake  carriers  with  rail  carriers  has  given  way  to  the 
competition  among  carriers  owning  both  rail  and  lake 
transportation  facilities.  Possibly  the  most  marked  form 
of  competition  on  the  Great  Lakes  at  the  present  time  is 
that  between  the  carriers  not  engaged  in  production  and 
the  mining  and  manufacturing  corporations  that  provide 
themselves  with  their  o^ti  lake  shipping  facilities.  Any 
attempt  on  the  part  of  the  carriers  to  charge  unreason- 


SERVICE  AND  EQUIPMENT  ON  INLAND  WATERWAYS     357 

able  rates  on  tlie  Great  Lakes  is  bound  to  result  in  the 
producers  themselves  becoming  carriers. 

Competition  on  the  Great  Lakes  is  regulated  by  two 
organizations :  the  Lake  Carriers'  Association,  whose  office 
is  located  in  Detroit,  and  the  Association  of  Lake  Lines, 
with  headquarters  at  Buffalo.  All  the  important  carriers 
on  the  Great  Lakes  are  members  of  the  Lake  Carriers' 
Association.  In  1905  this  organization  had  .542  members, 
owning  a  gross  tonnage  aggregating  nearly  1,500,000. 
The  association  concerns  itself  with  all  matters  of  interest 
to  lake  carriers,  particularly  with  the  improvement  of 
harbors,  channels,  and  other  traffic  conditions  on  the  Great 
Lakes.  The  Association  of  Lake  Lines  includes  in  its 
membership  the  principal  package  freight  lines  engaged  in 
regular  service.  The  organization  has  to  do  nuiinly  with 
the  regulation  of  rates  and  other  traffic  questions.  AW  the 
railroad  companies  having  lake  lines  are  members  of  the 
Association  of  Lake  Lines,  as  also  are  numerous  other  cor- 
porations operating  lines  of  vessels  on  the  lakes.  Without 
the  regulation  of  intercompetition  among  lake  carriers 
their  rivalry  would  lead  to  ruinous  rate  cutting.  The  rea- 
sons necessitating  cooperation  among  rival  railroads  re- 
quire the  same  kind  of  cooperation  among  competing  lake 
carriers. 

In  the  development  of  transportation  on  the  Great 
Lakes  the  people  of  the  United  States  have  been  more 
successful  than  they  have  been  in  building  up  an  ocean 
merchant  marine.  The  transportation  requirements  to  be 
met  on  the  Great  Lakes  have  called  for  the  use  of  vessels 
of  great  size  and  efficiency,  and  have  naturally  led  to  the 
concentration  of  the  management  of  the  business  into  the 
hands  of  a  relatively  small  numl)er  of  carriers  and  ship- 
pers. Foreigners  not  being  ])ermitted  to  operate  under  the 
American  flag,  the  lake  traffic,  as  well  as  our  coastwise 
commerce,  has  been  reserved  entirely  to  the  jjeople  of  the 


358     OCEAN    AM)    INLAND   WATl-;!!   TRANSPORTATION 

United  States;  this  eliiiiiiiatioii  of  foreign  competition  has, 
however,  in  no  wav  liindered  the  technical  development  of 
lake  shipj)ini;'.  The  Anjcrican  j)eo])lc  have  met  th(;  re- 
(luii-eiiients  of  the  lake  service  as  fully  as  they  have  solved 
the  enormously  difficult  problems  of  railroad  transporta- 
tion in  the  United  States. 


REFERENCE  FOR  FURTHER  READING 

The  best  information  regarding  the  organization  of  the  service 
and  the  equipment  employed  upon  the  inland  waterways  of 
the  United  States  may  be  found  by  consulting  the  current 
issues  of  such  papers  as  the  Marine  Review,  Cleveland,  Ohio, 
and  the  Nautical  Gazette,  New  York  City. 


CHAPTER    XXVII 

TRAFFIC    ON    THE    INLAND    WATEKWAYS    OF    THE    UNITED 

STATES 

The  total  vohmie  of  traliic  transported  on  the  inlan<l 
waterways  of  the  United  States  at  the  present  time  cannot 
be  stated,  because  the  statistics  are  regnlarlj  kept  for  only 
a  part  of  the  routes  employed  by  onr  domestic  commerce. 
An  effort  was  made  by  the  census  of  1890  to  ascertain  the 
tonnage  moved  on  our  inland  waterways  at  that  time ;  and 
the  United  States  Bureau  of  the  Census  is  now,  in  1906, 
again  preparing  to  compile  similar  statistics,  which  will 
not  be  ready  for  publication  until  1907.  A  few  years  ago 
the  Bureau  of  Statistics,  formerly  in  the  Treasury  De- 
partment and  now  connected  with  the  Department  of  Com- 
merce and  Labor,  began  to  publish  such  statistics  regard- 
ing the  internal  commerce  of  the  United  States  as  the 
bureau  could  obtain  from  boards  of  trade  and  other  vol- 
imtary  sources,  official  and  unofficial. 

Until  provision  is  made  by  act  of  CJongress  for  sys- 
tematically collecting  and  reporting  the  statistics  of  inland 
transportation,  as  the  statistics  of  railway  transportation 
are  now  compiled,  it  will  be  impossible  to  measure  com- 
pletely and  accurately  the  traffic  moved  on  the  inland 
waterways  of  our  country.  Fortunately,  the  tonnage  of 
the  main  inland  water  routes  is  known  with  approximate 
accuracy,  and  the  figures  for  those  waterways  will  indicate 
the  extent  to  which  the  internal  connnerce  of  the  I'liited 
States  is  transported  by  water. 

359 


360     OCEAN   AND   INLAND   WATER  TRANSPORTATION 

The  most  important  canal  in  llie  United  States  is  the 
Erie  Canal,  the  tonnage  of  which,  however,  has  tended  to 
decline  dnring  recent  years.  The  Erie  and  the  other 
canals  of  New  York  State  have  averaged  abont  8,500,000 
tons  of  freight  annually  dnring  the  past  five  years.  This 
small  volume  of  traffic  is  to  be  explained  by  the  fact  that 
the  Erie  Canal  for  many  years  has  needed  enlargement 
and  improvement  to  meet  the  conditions  of  present-day 
transportation.  Barges  with  animal  traction  capable  of 
handling  a  maximnm  cargo  of  only  240  tons  can  hardly 
be  expected  to  compete  snccessfully  with  railroads  over 
which  trainloads  of  1,500  tons  or  more  can  be  hauled. 
The  present  work  of  enlarging  the  canals  of  New  York 
State  so  that  they  will  accommodate  steam-propelled  barges 
carrying  1,000  tons  of  cargo  will  nnqnestionably  greatly 
increase  the  volume  of  traffic  moved  on  those  water- 
ways. 

The  traffic  on  the  Ohio  canals  is  small,  and  can  hardly 
be  expected  to  increase  until  the  canals  have  been  mod- 
ernized and  enlarged.  The  future  industrial  development 
of  the  State  of  Ohio,  the  enlargement  of  the  Ohio  canal, 
and  the  carrying  out  of  the  plan  that  will  provide  slack- 
water  navigation  in  the  Ohio  River  from  Pittsburg  to 
Cairo,  will  in  time  create  conditions  that  will  increase  the 
tonnage  of  traffic  that  can  advantageously  make  use  of 
the  canals  situated  as  are  those  between  Cleveland  and  the 
Ohio  River.  It  is  also  probable  that  the  future  develop- 
ment of  the  Miami  Valley  may  give  commercial  impor- 
tance to  a  canal  in  the  southwestern  part  of  the  State ;  it 
is  hardly  probable,  however,  that  a  large  volume  of  traffic 
will  ever  move  by  Avater  between  Cincinnati  and  the  head 
of  Lake  Erie. 

The  commerce  carried  on  the  Illinois  and  Michigan 
Canal,  connecting  Chicago  with  the  navigable  portion  of 
the  Illinois  River,  has  declined  with  the  cheapening  of 


TRAFFIC   ON  THE   INLAND  WATERWAYS  361 

transportation  by  rail.  The  traffic  on  this  canal  in  1882 
exceeded  1,000,000  tons;  the  traffic  in  1904,  however, 
amounted  to  only  47,616  tons.  The  United  States  Gov- 
ernment is  gradually  improving  the  Illinois  River,  and 
will  soon  complete  the  Hennepin  Canal,  connecting  Rock 
Island  on  the  Mississippi  River  with  the  great  bend  of  the 
Illinois  River  near  Hennepin.  The  completion  of  the 
Hennepin  Canal  will  give  a  continuous  canal  route  from 
the  Mississippi  River  at  Rock  Island  to  Chicago,  and  this, 
together  with  the  improved  navigation  of  the  Illinois 
River,  should  add  to  the  traffic  handled  on  the  Illinois 
and  Michigan  Canal.  For  some  years  an  agitation  has 
been  carried  on  for  the  enlargement  of  the  Illinois  and 
Michigan  Canal,  and  for  the  establishment  of  slack-water 
navigation  on  the  Illinois  River,  so  as  to  provide  a  chan- 
nel that  will  accommodate  much  larger  vessels  than  can 
now  use  the  Illinois  and  Michigan  Canal.  This  agitation 
was  started  by  the  construction  of  the  Chicago  Drainage 
Canal,  which  carries  a  large  volume  of  water  from  Lake 
Michigan  to  the  Des  Plaines  River,  and  thus  to  the  Illi- 
nois River. 

The  above  facts  regarding  the  traffic  of  the  canals  of 
Illinois,  Ohio,  and  ISTew  York  are  sufficient  to  show  that 
the  small  canals  built  many  years  ago  by  the  States  have 
ceased  to  be  of  much  commercial  importance.  Canals 
having  no  larger  dimensions  than  these  waterways  now 
possess  must  expect  to  have  a  declining  traffic;  this,  how- 
ever, does  not  prove  that  canals  of  greater  depth  and 
width,  connecting  our  chief  natural  inhiud  waterways  or 
serving  sections  of  country  having  litghly  dovclojx'd  in- 
dustries, may  not  be  useful  in  the  future. 

The  traffic  on  the  IIuds(m  River  l)etween  \c\v  York 
City  and  Albany  and  Troy,  in  185)0,  comprised  15,000,000 
tons  of  freight,  in  addition  to  the  3,500,000  tons  that 
passed  from  the  State  canals  of  Xew  York  to  tidewater 


362     OCEAN   AND   INLAND  WATER  TRANSPORTATION 

via  the  river.  The  present  tonnage  probably  exceeds  that 
of  1890,  but  the  exact  amount  cannot  be  stated. 

According  to  the  census  of  1890,  the  boats  and  barges 
afloat  on  the  Mississippi  River  and  its  various  tributaries 
numbered  7,445  craft,  with  a  total  enrolled  tonnage  of 
3,400,000.  The  freight  carried  by  these  vessels  that  year 
was  reported  to  be  30,000,000  tons,  and  the  number 
of  passengers  carried  was  11,000,000.  The  figures  for 
freight  tonnage  may  contain  some  duplications ;  and  the 
traffic  at  the  present  time  is  undoubtedly  less  than  it  was 
in  1890,  but  the  exact  amount  will  not  be  known  until 
the  completion  of  the  census  of  1906.  According  to  the 
United  States  Bureau  of  Statistics,  5,577  vessels  arrived 
and  cleared  at  Cairo  during  the  year  1904.  The  tonnage 
of  these  vessel  entrances  and  clearances  exceeded  3,500,- 
000.  The  figures  for  1905  were  4,254,428,  being  much 
larger  than  for  1904.  The  nature  of  this  traffic  is  indi- 
cated by  the  fact  that  of  the  7,268  vessels  that  entered 
and  cleared  at  Cairo  in  1905,  1,675  were  loaded  with 
coal,  719  with  lumber  and  wood,  and  742  with  general 
merchandise.  Other  vessels  carried  rock,  iron  and  steel, 
brick,  grain,  and  various  kinds  of  cargo. 

The  traffic  upon  the  Ohio  River  consists  most  .largely 
of  coal  carried  down  in  barges,  from  points  located  mainly 
along  the  Monongahela  and  Kanawha  rivers.  JSTearly 
4,000,000  tons  of  coal  annually  pass  Davis  Island  Dam, 
a  little  distance  below  the  city  of  Pittsburg.  The  traffic 
down  the  Kanawha  River  amounts  to  about  1,500,000 
tons,  most  of  which  is  coal.  The  manner  in  which  the 
coal  traffic  is  handled  down  the  Ohio  River  is  stated  as 
follows  by  the  Vice-President  of  the  Chamber  of  Com- 
merce, Pittsburg: 

Three  species  of  boats  loaded  on  the  Monongahela  River  for  the 
Ohio  River  trade  are  used  by  the  shippers,  ^'iz.,  coal  boats,  draw- 
ing 8  to  8^  feet,  and  carrying  1,000  to  1,100  tons;  coal  barges,  draw- 


364     OCEAN   AND   INLAM)   WATER  TRANSPORTATION 

ing  6  to  7  feet,  carrying  500  tons;  and  coal  floats,  carrying  from 
200  to  300  tons. 

The  towboats  usually  bring  from  the  mines  about  3,000  tons  of 
coal  in  small  fleets,  arranged  for  ])assing  the  locks  conveniently. 
...  At  Pittsburg  .  .  .  the  small  coal  fleets  are  moored  while 
awaiting  rises  sufficient  for  navigation  on  the  Ohio  River.  .  .  . 
When  rises  of  10  feet  occur,  or  sufficient  for  8-feet  coal  barges,  fleets 
from  10,000  to  15,000  tons  are  made  up  for  shipment  to  Cincinnati 
or  Louisville. 

At  Louisville,  two  and  sometimes  three  of  the  Pittsburg  fleets 
are  made  up  into  monster  fleets  of  from  35,000  to  40,000  tons,  and 
towed  to  New  Orleans  by  powerful  towboats.  A  fleet  conveying 
40,000  tons  covers  about  ten  acres. 

According  to  the  report  of  the  Merchants  Exchange  of 
St.  Louis  there  are  7  lines  of  river  steamers  plying  be- 
tween St.  Louis  and  other  ports  on  the  Mississippi  Kiver 
and  tributaries  to  the  Mississippi ;  there  are  also  inde- 
pendent packets  and  towboats,  some  of  which  are  operated 
on  the  lower  Mississippi  and  some  on  the  upper  Missis- 
sippi. The  figures  for  this  St.  Louis  traffic  have  averaged 
about  500,000  tons  during  recent  years. 

The  great  section  of  country  drained  hv  the  Missis- 
sippi River  and  its  many  navigable  affluents  is  still  too 
sparsely  settled  in  most  localities  to  afford  a  large  ton- 
nage for  shipment  by  water.  When  the  region  comes  to 
have  a  dense  population,  and  to  have  a  greater  amount 
of  manufactures  requiring  the  shipment  of  large  quanti- 
ties of  materials,  there  will  be  greater  use  made  of  the 
Avaterways.  The  opening  of  the  Panama  Canal  will  en- 
hance the  importance  of  the  Mississippi  system  of  water- 
ways, and  of  the  other  rivers  flowing  into  the  Gulf  of 
Mexico.  The  traffic  on  the  Mississippi  and  other  river 
systems,  moreover,  can  hardly  increase  to  much  extent 
before  the  more  important  improvements  and  extensions 
now  being  made  are  carried  out.  Only  by  connecting  the 
river  system  of  Alabama  with  the  coal  and  iron  region  of 


TRAFFIC   ON  THE   INLAND   WATERWAYS  365 

that  State,  by  luiitiiig  the  Mississippi  River  with  the 
Great  Lakes  by  an  efficient  waterway,  and  by  completing 
the  iinpr(3vements  of  the  Ohio,  the  Illinois,  Columbia,  and 
other  rivers,  will  we  establish  conditions  favorable  for  the 
growth  of  the  traffic  of  our  inland  waterways. 

The  connnerce  handled  on  the  Great  Lakes  is  of  large 
and  rapidly  growing  volume.  The  conditions  for  the  de- 
velopment of  a  heavy  traffic  coidd  hardly  be  more  favorable 
than  they  are  in  connection  with  this  unrivaled  inland 
waterway.  Vessels  drawing  twenty  feet,  and  carrying 
10,000  or  12,000  tons  of  cargo,  have  an  uninterrupted 
watercourse  a  thousand  miles  in  length,  connecting  the 
iron  and  copper  mines,  the  forests,  and  the  grain  fields 
about  and  west  of  Lake  Superior  with  the  coal  fields  and 
highly  developed  manufacturing  sections  south  and  east 
of  Lake  Erie,  uniting  Chicago,  Milwaukee,  and  other 
great  trade  centers  of  the  central  West  with  the  industrial 
East,  and  affording  Avater  transportation  facilities  of  the 
highest  efficiency  to  all  the  many  thriving  cities  located 
on  the  shores  of  the  lakes. 

The  vessels  employed  in  the  transportation  of  the  com- 
merce of  the  Great  Lakes  have  a  total  enrolled  tonnage 
of  over  2,000,000  tons,  and  most  of  this  tonnage  consists 
of  modern  steel  steamers  of  exceptional  traffic  efficiency. 
The  rate  at  which  the  traffic  of  the  Great  Lakes  has  gTown 
since  1870  is  indicated  by  the  figures  in  the  table  on 
page  366  for  the  vessel  tonnage  at  the  beginning  of  each 
five-year  period  since  that  date. 

About  one  third  of  the  total  tonnage  of  shipi)ing  under 
the  American  flag  is  in  our  Great  Lakes  fleet,  and  it  is  this 
third  of  our  tonnage  that  is  showing  the  most  rapid 
gains. 

The  cargo  tonnage  of  the  Great  Lakes  traffic  shipped 
during  the  calendar  year  1905,  from  the  187  ports  from 
which  the  United  States   Bureau  of   Statistics   received 


;j()()     OCJOAN    A.\l>    I.M.AM)    W  ATEH    'J'RAX.SJ'OKTATION 


SAIL  AND  STEAM  TONNAGE  OF  THE  GREAT  LAKE  FLEET 
BY    FIVE-YEAR  PERIODS,  FROM   1870  TO   1905. 


■^'kau. 

Sail. 

1S7().... 

264,609 

1875.... 

339,787 

1880.... 

304,933 

1885.... 

313,129 

1890.... 

32S,65() 

1895.... 

300,642 

1903.... 

335,183 

1905.... 

301,115 

142,973 
202,307 
212,045 
335,859 
652,923 
S57,735 
1,110,565 
1,647,793 


Caii.'il 
Boats. 


249,553 

250,657 
47,159 
70,150 
67,574 
44,074 
41,430 
43,775 


Barges. 

27,569 
15,140 
40,965 
3(),S10 
13.910 
39,008 
78,409 
69,464 


Total. 

684,704 

837.891 

605.102 

749,94S 

1,063,063 

1,241,4.59 

1,565,587 

2,062,147 


Iiicrea.sc. 


1.53,187 
232.789 
144,846 
313,115 
178,396 
324,128 
496,560 


reports,  niuouiited  to  07,345,(320  net  tons.  Five  years 
earlier  the  shipments  amounted  to  45,138,420  tons. 

The  best  single  index  of  the  traffic  on  the  Great  Lakes 
is  to  be  found  in  the  vessel  and  cargo  tonnage  passing  the 
Sault  Ste.  Marie  locks  between  Lakes  Superior  and  Hu- 
ron. During  the  calendar  year  1905,  86,778,738  tons  of 
freight  passed  from  Lake  Superior  to  Lake  LIuron,  and 
7,491,942  tons  were  carried  in  the  opposite  direction — 
the  total  cargo  tonnage  passing  the  locks  being  44,270,680 
tons.  The  value  of  this  freight  was  about  $450,000,000. 
The  importance  of  the  Great  Lakes  to  the  industrial  prog- 
ress of  thv3  United  States  is  partially  indicated  by  the 
fact  that  the  traffic  that  passed  the  "  Soo  "  was  carried  an 
average  distance  of  850  miles.  The  transportation  cost 
per  ton  mile  in  1904  was  only  .8  of  a  mill  (.081  of  a 
cent). 

Tlie  volume  of  traffic  passing  the  Sault  Ste.  Marie 
locks  annually  from  1881  to  1905,  and  the  increase  each 
year,  is  graphically  shown  by  the  chart  on  page  367. 

The  chief  characteristics  of  the  commerce  moved  on 
the  Great  Lakes  are  the  preponderance  of  eastbound  over 
westbound  tonnage,  and  the  fact  that  a  few  commodities 
make  up  most  of  the  freight.     The  following  analysis  of 


TRAFFIC   ON  THE   INLAND  WATERWAYS 


367 


the  traffic  at  the  Saiilt  Ste.  Marie  aiul  on  the  lakes  as  a 
whole  will  indicate  the  main  features  of  the  service: 

(1)  The  eastboiind  tonnage  in  1905  was  nearly  five 
times  that  moving  westward.  This  results  mainly  from 
the  great  tonnage  of  iron  ore  transported  from  Lake  Su- 
perior to  the  soft-coal  fields.  The  raw  materials  carried 
eastward  exceed  in  weight  the  manufactures  and  the  coal 
which  comprise  most  of  the  westbound  tonnage. 

(2)  The  commerce  of  the  Great  Lakes  is  composed 
mainly  of  a  few  commodities:  Iron  ore  in  1905  comjirised 


TonsFreight 
45,000.000 
42.000.000 
39.000.000 
36.000.000 
3i.000.000 
30.000.000 
27.000.000 
24.000.000 
21.000.000 
18.000.000 
15.000.000 
12.000.000 


3.000.000 
1.000.000 


«l    1882    1883    1884  laS   1886    1887    1888    1889   1890    1831    1832    IS3i    BM    I89S    I89S   1897   IS36    «    1900    BW    1902  I9QS    I90t   I9IS 

) 

/ 

/ 

} 

■^ 

s. 

/ 

/ 

\ 

y 

/ 

r 

/ 

^ 

/ 

^ 

X 

/ 

y 

/ 

y 

_^ 

y 

^ 

■■" 

six  sevenths  of  the  total  tonnage  moved  eastward  llirough 
the  Sault  Ste.  Marie  locks,  and  one  half  of  the  aggregate 
tonnage  of  shipments  from  all  the  lake  ports.  Coal  made 
up  six  sevenths  of  the  westbound  tonnage  at  the  Sault  Ste. 
Marie,  and  nearly  one  fiflh  of  the  total  lake  traffic. 
Wheat,  otlicr  kinds  of  grain,  and  llonr  con^titulc  a  large 
tonnage  anionnling  to  one;  tenlli  of  I  lie  iVeighl  easl\var<l 
at  the  Sault  Ste.  AFarie,  and  about  one  twelfth  (d'  the  total 
lake  traffic.  Lund)er  is  another  large  item,  amounting  to 
about  one  twentieth  of  th(>  westbound  Sault  Ste.  Marie 
traffic  and  of  the  aggregate  lake  tonnage.     Iron  ore,  grain 


.308     OCEAX   AND   INLAND   WATER  TRANSPORTATION 

and  flour,  and  lumber  include  about  ninety-nine  per  cent 
of  the  tonnage  outbound  from  Lake  Superior.  These 
three  classes  of  traffic,  and  coal,  now  comprise  over  ninety 
per  cent  of  the  Great  Lakes  tonnage,  while  "  unclassified  " 
or  miscellaneous  package  freiglit  accounts  for  only  eight 
or  nine  per  cent  of  the  total. 

Seven  eighths  of  the  total  package  freight  is  shipped 
westbound  from  the  manufacturing  East  to  the  agricul- 
tural and  mining  West  and  Xorthwest.  The  westbound 
trafiic  on  the  lakes  consists  chiefly,  in  addition  to  coal,  of 
general  merchandise  of  all  kinds,  iron  manufactures,  and 
salt. 

(3)  By  far  the  larger  part  of  the  freight  transported 
on  the  Great  Lakes  is  long-distance  through  traffic — iron 
and  copper  ore,  grain,  flour,  and  lumber,  from  Lake  Su- 
perior to  Lake  Erie ;  grain  and  lumber,  from  Lake  Michi- 
gan to  Lake  Erie,  and  coal  from  eastern  Lake  Erie  to  the 
head  of  Lakes  Michigan  and  Superior.  These  facts  ex- 
plain why  the  average  distance  a  ton  of  freight  is  moved 
on  the  lakes  is  three  times  the  average  distance  freight  is 
hauled  by  rail  in  the  Ignited  States.  Even  the  package 
freight  or  general  merchandise  handled  on  the  lakes  is 
long-distance  trafiic  carried  beyond  the  lake  on  which  the 
shipment  originates.  There  are  only  three  steamship  lines, 
each  operating  but  a  few  small  vessels,  engaged  solely  in 
Lake  Erie  traffic.  All  the  large  lines  of  steamers  navigate 
two  or  more  lakes. 

(4)  Although  there  are  nearly  200  ports  on  the  Great 
Lakes,  most  of  the  traffic  is  handled  at  a  relatively  small 
number  of  places.  This  is  shown  by  the  distrilnition  of 
the  four  leading  articles  of  traffic:  iron  ore,  grain,  lumber, 
and  coal. 

Iron  ore,  which  comprised  almost  half  of  the  entire 
tonnage  in  1905,  is  nearly  all  shipped  from  six  Lake  Supe- 
rior  ports — Two    Harbors,    Superior,    Diiluth,    Ashland, 


TRAFFIC   ON  THE   INLAND   WATERWAYS  369 

Escanaba,  and  Marquette — and  about  half  of  the  ore  is 
loaded  at  Duluth  and  Two  Harbors.  Most  of  the  ore 
from  these  six  Superior  ports  is  carried  to  nine  cities 
on  Lake  Erie — Ashtabula,  Cleveland,  Conneauf,  Lorain, 
Buffalo,  Xorth  Tonawanda,  Erie,  Fairport,  and  Toledo 
— over  half  the  tonnage  being  discharged  at  Ashtabula, 
Cleveland,  and  Conneaut.  The  only  important  destina- 
tion of  iron  ore,  outside  of  Lake  Erie,  is  Chicago,  which 
receives  al:)out  ten  per  cent  of  the  ore  shipped  on  the 
lakes. 

Wheat  is  shipped  eastward  chiefly  from  J^uluth,  Supe- 
rior, Chicago,  Milwaukee,  and  Toledo.  Flour  is  dis- 
patched principally  from  Chicago,  Milwaukee,  Superior, 
Duluth,  and  Gladstone  (Michigan).  The  destination  of 
most  of  the  wheat  and  flour  is  Buffalo,  although  Erie  and 
Ogdensburg  are  ports  of  some  importance. 

The  lumber  traffic  originates  and  terminates  at  a 
larger  number  of  ports  than  is  true  of  the  iron  ore  and 
grain  shipments.  One  fifth  of  the  lumber  tonnage,  how- 
ever, starts  from  Duluth,  other  important  shipping  points 
being  Manistique,  Manitowoc,  and  Ashland.  The  largest 
recipient  of  lumber,  naturally,  is  Chicago,  after  which 
come  jSTorth  Tonawanda,  Cleveland,  Ludington,  and 
Buffalo. 

Anthracite  coal  is  shipped  mostly  from  one  port,  Buf- 
falo, the  only  other  one  from  which  much  is  sent  being 
Erie.  The  hard  coal  is  distributed  quite  generally  among 
the  cities  about  Lakes  Michigan  and  Superior,  but  Chi- 
cago, Milwaukee,  and  Superior  receive  much  larger  quan- 
tities than  other  places  do.  The  bituminous  coal  is 
shipped  from  numerous  Lake  Erie  ports,  but  Ashtabula, 
Toledo,  Cleveland,  Lorain,  and  Sandusky  are  by  far  the 
most  important  shipping  points.  Although  several  ports 
on  Lakes  INlichigan  and  Superior  receive  soft  coal  via 
the  lakes,  ^lilwaukee,  Superior,  and  Duluth  take  over  half 


370     OCEAN   AND   INLAND   WATER  TRANSPORTATION 

of  the  total  aiiiouiit.  The  lariic  (iiiantitv  of  soft  coal  re- 
quired in  Chicago  is  siJi)|)lied  by  the  railroads. 

(5)  Another  characteristic  of  the  tratKc  on  the  Great 
Lakes  is  that  most  of  the  vast  tonnage  is  now  handled  by 
a  relatively  small- nuiiiher  of  highly  efficient  carriers.  The 
business  is  organized  upon  the  economical  basis  of  large- 
scale  transportation.  The  organization  of  the  service  and 
the  extent  to  which  lake  transportation  is  controlled  by 
the  railroads  and  by  the  large  producers  and  shippers  who 
supply  the  lake  traffic  were  considered  in  the  preceding 
chapter. 

Instructive  comparison  may  be  made  between  the  traf- 
fic on  the  railroads  and  inland  waterways  of  the  United 
States.  The  commerce  of  the  Great  Lakes  compares  fa- 
vorably with  railroad  freight  in  rate  of  growth  and  vol- 
ume. The  total  tonnage  transported  by  our  railroads  in 
1904  was  641,680,547,  and  the  ton  mileage,  or  nundjer 
of  tons  moved  one  mile,  was  174,522,089,577.  The  ton- 
nage of  the  traffic  shipped  on  the  Great  Lakes  (tonnage 
of  shi])mcnts  only)  for  the  last  three  years  averaged  about 
60,000,000  tons.  (In  1905  it  amounted  to  67,345,620 
tons.)  The  ton  mileage  of  the  lake  traffic  as  a  whole  is 
not  known,  hut  it  is  not  far  from  50,000,000,000,  the 
traffic  on  the  lakes  being  about  thirty  per  cent  of  the  ton 
mileage  of  the  traffic  by  rail.  The  ton  mileage  of  the 
freight  handled  in  1904  over  the  Vanderbilt  lines  in  Xew 
York  State,  and  the  Michigan  Central,  the  Lake  Shore, 
and  the  Nickel  Plate  betAveen  Buffalo  and  Chicago,  ag- 
gregated 15,205,135,411.  In  1890  these  rail  lines  had  a 
traffic  amounting  to  7,338,472,141  ton  miles.  Their  total 
linear  mileage  was  4,960  in  1890,  and  6,743  in  1904. 
The  entire  tonnage  of  shipments  on  the  lakes  in  1890, 
according  to  the  United  States  census  of  that  year,  was 
25,266,974,  and  the*  ton  mileage  probably  was  about 
20,000,000,000. 


TRAFFIC   ON  THE   INLAND  WATERWAYS  371 

The  traffic  on  the  Mississippi  River,  and  on  some  of 
its  tributaries,  with  the  exception  of  the  Ohio,  is  either 
stationary  or  declining.  The  same  is  trne  of  the  tonnage 
of  most  of  the  rivers  and  canals  of  the  Unit(H]  States. 
The  traffic  carried  hv  the  railroads  is  raj)idl_v  increasing, 
and  will  iin(iuestional)ly  grow  steadily  larger  with  the  ])rog- 
rcss  of  the  United  States  in  population  ami  in  iii<histry. 
The  commerce  making  use  of  our  rivers  and  canals  can 
hardly  be  expected  to  show  much  gain  in  the  innnediate 
future. 

At  least  two  conditions  must  bo  fulfilled  before  the 
rivers  and  canals  of  the  United  States  will  show  nnich 
improvement  in  the  volume  of  their  traffic.  Our  main 
streams,  such  as  the  Ohio,  Mississippi,  and  the  Columbia, 
and  our  less  important  rivers,  such  as  the  main  tributaries 
of  the  Ohio  and  those  which  reach  the  Gulf  via  Mobile 
Bay,  must  have  the  improvements  now  in  progress  com- 
pleted before  shippers  will  find  it  profitable  to  use  the 
waterways  instead  of  the  railroads  for  transporting  the 
bulky  commodities,  such  as  coal,  lundoer,  grain,  cotton, 
etc.,  adapted  to  water  transjiortation. 

The  other  condition  tluit  must  precede  a  larger  use  of 
our  natural  inland  waterways  in  most  sections  of  the  coun- 
try is  a  great(n'  density  of  population  and  a  more  liighly 
developed  state  of  industry.  In  most  sections  of  the  coun- 
try, at  the  present  time,  the  demands  for  transportation 
are  adequately  met  by  the  railroads;  in  course  of  time, 
however,  many  sections  of  the  country  will  find  both  water- 
ways and  railroads  n(>cessary  for  su]>plying  adequately  and 
economically  the  transportation  services  reipiired  to  meet 
business  conditions. 

Inland  water  transportation  in  tlie  United  States  is 
undeveloped  except  u])on  our  Great  Lakes.  The  condi- 
tions in  our  country  in  this  regard  are  imlike  those  in 
Germany,  Belgium,  Holland,  and  France,  where  the  con- 


372     OCEAN  AND  INLAND  WATER  TRANSPORTATION 

struction  and  enlargement  of  the  waterways  has  received 
ahnost  as  much  attention  as  has  been  given  to  providing 
those  countries  with  adequate  railway  facilities.  The 
Khine,  Elbe,  Seine,  and  Danube,  and  other  important 
streams  of  Europe,  are  used  for  the  transportation  of 
g'reat  volumes  of  traffic.  Moreover,  the  countries  just 
named  have  systematically  connected  the  important  rivers 
with  canals,  for  the  purpose  of  providing  the  country,  as 
far  as  practicable,  with  a  network  of  waterways  com- 
parable with  the  network  of  railways. 

Some  critics  are  of  the  opinion  that  the  countries  of 
continental  Europe  have  overemphasized  w^ater  transpor- 
tation, and  that  it  would  have  been  better  had  more  atten- 
tion been  given  to  the  development  of  their  railways,  and 
less  to  the  improvement  and  extension  of  their  system 
of  waterways.  Whether  this  criticism  is  valid  or  not  need 
not  be  discussed  in  this  connection ;  attention  is  here  called 
only  to  the  fact  that  numerous  countries  outside  of  the 
United  States  have  thought  best  to  improve  their  inland 
waterways,  and  the  improvement  of  those  waterways  has 
resulted  in  their  use  for  a  large  volume  of  traffic;  and 
attention  may  also  be  called  to  the  fact  that  France,  Ger- 
many, Belgium,  and  Holland  have  all  prospered  indus- 
trially and  otherwise  while  they  have  been  following  this 
plan  of  developing  facilities  for  both  rail  and  water 
transportation. 

REFERENCES  FOR  FURTHER  READING 

"Report  on  the  Agencies  of  Transportation  in  the  United  States." 
"  United  States  Census  of  1880,"  vol.  iv. 

"Report  on  Transportation  Business  in  the  United  States.  Part 
II.  Transportation  by  Water."  "United  States  Census  of 
1890." 

Dixox,  F.  H.  "Water  Transportation:  Its  Economic  Impor- 
tance."    1905.     (This  is  a  valuable  paper,  twenty-six  pages  in 


TRAFFIC  ON  THE  INLAND  WATERWAYS  373 

length,  published  in  the  Official  Proceedings,  St.  Louis  Railway 
Club,  vol.  X,  No.  7.) 

Brock,  S.  G.  "Commerce  of  the  Great  Lakes,  the  Mississippi 
River  and  Its  Tributaries."  1891.  House  Executive  Docu- 
ments, No.  6,  Part  II,  52d  Congress,  1st  Session.  (This  report 
by  Mr.  Brock,  who  at  the  time  of  making  the  report  was 
Chief  of  the  Bureau  of  Statistics  in  the  Treasury  Department, 
contains  in  Appendix  No.  1  a  valuable  report  on  the  "Com- 
merce and  Shipping  of  the  Great  Lakes,"  by  Charles  H.  Keep, 
then  Secretary  of  the  Lake  Carriers'  Association.  Appendix 
No.  2  discusses  the  "  Commerce  of  the  Mississippi  River,"  in 
a  report  prepared  by  George  H.  Morgan,  Secretary  of  the  Mer- 
chants Exchange  of  St.  Louis.) 

TuNELL,  George  G.  "Transportation  on  the  Great  Lakes  of 
North  America."  1898.  House  Document  No.  277,  55th 
Congress,  2d  Session. 

Babcock,  W.  I.  "  Shipping  on  the  Great  Lakes."  The  Marine 
Review,  February  22,  1906. 


CHAPTER    XXVIII 

qm'E    RELATIONS    OF   INLAND    WATERWAYS    AND    KAILUOADS 
AS    CARRIERS 

The  transportation  services  performed  by  the  inland 
waterways  differ  in  many  particulars  from  the  services 
I'endered  by  railroads.  Waterways  are  especially  adapted 
to  the  transportation  of  snch  articles  as  grain,  lumber, 
minerals,  sand,  brick,  and  other  commodities  that  may  be 
shipped  in  large  quantities  and  at  a  slow  rate  of  speed. 
The  railroad  is  adapted  to  the  transportation  of  all  varie- 
ties of  articles,  and  in  the  case  of  high-priced  commodities 
requiring  rapid  transportation  the  railroad  is  the  only 
carrier  capable  of  performing  the  service. 

The  relations  of  inland  waterways  as  carriers  were 
well  summarized  in  the  following  resolution  adopted  some 
years  since  by  the  Fourth  International  Congress  on 
Inland  l^avigation :  "  The  existence  and  development  to- 
gether of  railways  and  waterways  is  desirable,  first,  be- 
cause these  two  means  of  transport  are  the  complements 
of  each  other,  and  ought  to  contribute  each  according  to 
its  special  merits  to  the  public  good ;  second,  because, 
viewed  broadly,  the  industrial  and  commercial  develop- 
ment which  will  result  from  the  improvement  of  the 
means  of  communication  must  in  the  end  profit  both  rail- 
ways and  waterways." 

Waterways  are  both  competitors  and  complements  of 
the  railroads.  The  two  means  of  transportation  serve 
commerce  in  different  ways.  When  shippers  are  able  to 
374 


WATERWAYS   AND   RAILROADS  AS   CARRIERS      375 

choose  between  the  two  methods  of  transportation,  the 
\vaterways  compete  with  the  raih'oads  for  the  carriage  of 
several  kinds  of  traffic,  and  the  competition  of  efficient 
waterways  compels  the  i-ailroads  to  make  tlieir  rates  with 
reference  to  water  competition;  but  tiie  ultimate  effect  of 
Avater  competition  is  to  increas(>  the  traffic  and  the  reve- 
nues of  the  competing  railroad  lines.  This  fact  may  be 
explained  by  a  brief  analysis  of  the  relations  of  the  two 
agencies  of  transportation. 

As  coiiijx'titors  of  the  raili-oads,  waterways  phice  a 
limit  on  the  nuixinium  charges  wliich  the  rail  carrier  may 
impose.  The  most  conspicuous  illustration  of  ti:is  fact  is 
the  effect  of  the  rates  on  the  Great  Lakes  upon  the  charges 
of  the  railroads  that  compete  for  the  traffic  free  to  move 
either  by  the  lakes  or  by  rail.  In  times  past  tlie  Erie 
Canal  has  placed  a  very  definite  maximum  limit  upon 
raihT)ad  charges  between  the  lakes  and  tidewater.  At  the 
present  time,  however,  it  is  possible  to  carry  traffic  by 
rail  about  as  cheaply  as  it  can  be  moved  by  tlie  unim- 
proved Erie  Canal.  The  enlargement  of  that  waterway 
now  in  progress  will  undoubtedly  restore  to  it  the  influence 
it  has  formerly  had  u])on  railroad  charges. 

The  influence  of  water  transportation  on  rail  rates  is 
especially  conspicuous  in  the  case  of  the  Danube,  Illiine, 
Elbe,  and  other  rivers  of  Europe  upon  wliich  there  is  a 
large  volume  of  traffic. 

A  study  of  the  annual  report  of  the  ( 'hief  of  Engineers 
of  the  United  States  x\rmv  will  show  that  a  large  nmuber 
of  navigable  rivers  of  the  United  States,  even  in  their 
present  undeveloped  condition,  exercise  more  or  less  influ- 
ence locally  u])on  the  charges  imposed  by  the  railroads. 
This  influence  of  water  trans])ortation  upon  rail  trans- 
portatirm  affects  only  a  part  of  the  traffic  handled  by  rail, 
and  its  influence  in  the  case  of  most  waterways  is  local. 
The  competition  of  waterways  is  not  a  complete  and  ade- 


376     OCEAN    AND    INLAND    WATKI?    TRANSPORTATION 

(juatc  regulator  of  charges  of  r;iilroa<Is,  hut  it,  is  of  such 
advantage  to  the  public  that  most  countries  are  spending 
large  sums  of  money  to  increase  and  widen  the  scope  of 
water  competition. 

Tlie  public  estimation  put  upon  the  efficacy  and  value 
of  competition  of  waterways  with  railroads  was  stated 
twenty  years  ago,  in  the  report  prepared  by  a  Senate  com- 
mittee, of  which  Hon.  Shelby  M.  Cullom  was  chairman, 
to  accompany  the  bill  which  in  1887  became  the  ])resent 
Interstate  Commerce  Act.     The  report  stated  that 

"  The  evidence  before  the  committee  accords  with  the 
experience  of  all  nations  in  recognizing  the  water  routes 
as  the  most  efficient  cheapeners  and  regulators  of  railway 
charges.  Their  influence  is  not  confined  within  the  limits 
of  the  territory  immediately  accessible  to  water  communi- 
cation, but  extends  further,  and  controls  railroad  rates  at 
such  remote  interior  points  as  have  competing  lines  reach- 
ing means  of  transport  by  water.  Competition  between 
railroads  sooner  or  later  leads  to  combination  or  consolida- 
tion, but  neither  can  prevail  to  secure  unreasonable  rates 
in  the  face  of  direct  competition  wuth  free  natural  or  arti- 
ficial water  routes.  The  conclusion  of  the  committee  is, 
therefore,  that  natural  or  artificial  channels  of  communi- 
cation by  water,  when  favorably  located,  adequately  im- 
proved, and  properly  maintained,  afford  the  cheapest 
method  of  long-distance  transportation  now  kno^^•n,  and 
tliat  they  must  continue  to  exercise  in  the  future,  as  they 
have  invariably  exercised  in  the  past,  an  absolutely  con- 
trolling and  beneficially  regulating  influence  upon  the 
charges  made  upon  any  and  all  means  of  transit."' 

In  order  to  be  an  effective  competitor  of  the  railroads 
the  waterway  must,  however,  meet  the  conditions  of 
present-day  commerce.  Xo  transportation  agency  can  be 
of  value  to  the  public  unless  it  is  prepared  to  perform  the 
transportation  services   shippers   desire   to  secure.      The 


WATERWAYS   AND   RAILROADS   AS   CARRIERS      377 

Great  Lakes  in  the  United  States  and  the  main  water- 
ways of  Europe  fulfill  the  transportation  conditions  de- 
manded by  present  business  methods.  The  same  is  true 
of  a  few  of  the  rivers  of  the  United  States,  though  in  the 
case  of  many  of  our  rivers  and  most  of  the  American 
canals  this  is  not  true.  These  antiquated  waterways  have 
ceased  to  be  effective  competitors  of  our  railroads  wdiose 
technical  development  is  of  the  highest  order. 

Waterways  are  complements  of  the  railroads.  In  the 
long  run  water  competition  is  not  ruinous,  but  helpful,  to 
tlie  railroads.  The  truth  of  this  somewhat  paradoxical 
statement  is  due  to  the  fact  that  the  two  means  of  trans- 
portation are  different  agents  of  commerce.  The  water- 
way, such  as  the  Great  Lakes  or  the  Rhine  River,  by 
providing  facilities  for  the  cheap  transportation  of  a  large 
tonnage  of  bulky  commodities,  so  promotes  industrial  de- 
velopment and  so  increases  the  density  of  population  as 
ultimately  to  give  the  railroads  a  larger  and  more  profit- 
able trafiic  than  they  would  secure  if  the  waterway  were 
not  in  existence. 

Canals,  rivers,  and  lakes  create  a  large  share  of  their 
traffic.  The  cost  of  transportation  determines  to  a  great 
extent  the  amount  of  goods  shipped.  Cheaper  rates  give 
to  existing  categories  of  freight  a  larger  and  wider  mar- 
ket and  introduce  into  commerce  new  articles,  such,  for 
instance,  as  sand,  stone,  straw,  fertilizers,  and  wood,  which 
were  formerly  unable  to  bear  the  costs  of  transportation. 
Again,  the  waterway  creates  traffic  for  the  railroads  as 
well  as  for  itself.  It  makes  raw  materials  cheaper,  in- 
creases the  number  of  those  that  are  available  for  use,  and 
thus  adds  to  the  products  of  agriculture  and  manufactures 
seeking  transportation.  The  effects  of  increasing  and 
cheapening  raw  materials  are  complex ;  cheaper  wholesale 
and  retail  prices  and  higher  wages  are  possible,  and  these 
in  turn  prepare  the  way  for  a  larger  and  more  varied 


378     OCEAN   AND   INLAND  WATER  TRANSPORTATION 

consumption  of  goods.  This  means  important  aiJditions 
to  the  shipments,  especially  of  manufactured  goods,  the 
kind  of  freight  which  from  its  nature  falls  mainly  to  the 
railroads. 

Being  complements  as  well  as  competitors  of  the  rail- 
roads, it  is  desirable  both  for  the  public  and  for  the  rail- 
roads that  the  two  means  of  transportation  should  be 
coordinated.  While  there  is  no  sharp  division  of  freight 
between  waterways  and  railroads — one  kind  of  traffic  not 
being  carried  invariably  by  water  and  other  kinds  by  rail 
— the  coordination  of  the  two  means  of  transportation  en- 
ables each  carrier  to  handle  the  traffic  for  which  it  is  best 
adapted.  This  coordination  of  rail  and  water  routes  has 
been  well  worked  out  on  the  Great  Lakes  with  most  eco- 
nomical results.  The  policy  of  Germany,  France,  and 
certain  other  European  countries  also  is  to  coordinate  rail 
and  water  routes  for  the  purpose  of  enabling  each  means 
of  transportation  to  jDcrform  to  the  best  advantage  the 
service  for  which  it  is  adapted. 

The  coordination  of  rail  and  water  transportation  has 
a  favorable  rather  than  a  detrimental  effect  upon  railroad 
revenues.  If  the  waterway  carries  a  large  traffic  the 
freight  and  passenger  business  of  the  railroads  becomes 
more  profitable.  In  a  thickly  settled  country,  whose  in- 
dustries and  trade  require  the  transportation  of  large 
quantities  of  raw  materials  and  manufactures,  and  where 
the  traffic  is  so  heavy  as  to  provide  a  large  tonnage  for 
movement  both  for  the  railways  and  the  waterways,  the 
division  of  the  traffic  between  the  two  carriers  has  the 
effect  of  making  the  traffic  of  the  railroads  relatively  more 
profitable.  Manufactures  and  other  commodities  of  high 
value,  upon  which  the  rail  rates  are  greater  than  they  are 
u])on  materials  of  industry,  constitute  a  larger  percentage 
of  the  total  traffic  of  tlic  railroads  than  they  would  consti- 
tute if  the  waterway  were  not  in  existence.     The  effect  of 


WATERWAYS  AND   RAILROADS   AS  CARRIERS      379 

this  upon  the  railroads  is  to  lower  the  ratio  of  operating 
expenses  to  gross  receipts ;  or,  stated  otherwise,  to  increase 
the  net  profits  resulting  from  the  transportation  of  freight. 


REFERENCE    FOR    FURTHKK    RKADIXO 

Johnson,  E.  R.  "Inland  Waterways:  Their  Relation  to  Trans- 
portation." Chapters  IV,  V,  and  VI.  Ainerican  Academy 
of  Political  and  Social  Science,  Philadelphia,  September, 
1893. 


26 


CHAPTEK    XXIX 

THE    FUTURE    OF   INLAND    WATER   TRANSPORTATION   IN    THE 
UNITED    STATES 

The  people  of  the  United  States  possess  an  extensive 
system  of  natural  waterways,  and  the  question  of  their 
f>essible  usefulness  in  promoting  the  industrial  and  com- 
mercial progress  of  the  country  presents  a  problem  of 
great  moment.  The  question  as  to  whether  our  waterways 
shall  be  improved  or  not  has  already  been  answered  in  the 
affirmative.  The  United  States  is  now  engaged  in  the 
improvement  and  maintenance  of  a  large  number  of  in- 
land waterways.  The  State  of  New  York  is  spending  over 
$100,000,000  in  reconstructing  the  Erie  and  Cham  plain 
canals ;  the  State  of  Ohio  is  spending  a  moderate  sum  in 
improving  its  waterways ;  and  the  agitation  in  favor  of 
public  aid  to  water  transportation  is  being  carried  on  in 
several  other  States.  Is  the  policy  that  is  being  pursued 
by  the  United  States,  and  some  of  the  States,  a  wise  one  ? 
Will  the  future  transportation  services  of  our  inland 
waterways  justify  carrying  out  this  policy  ? 

As  far  as  the  Great  Lakes  are  concerned  there  can  be 
no  question  as  to  the  wisdom  of  what  has  been  done  to 
improve  their  navigation ;  nor  is  there  any  doubt  concern- 
ing the  advisability  of  continuing  the  deepening  and  en- 
largement of  the  principal  harbors  of  the  Great  Lakes, 
and  of  giving  such  depth  and  width  to  the  channels  con- 
necting the  lakes  as  may  be  required  to  meet  the  demands 
of  the  commerce  and  shipping  of  the  Great  Lakes.  The 
380 


FUTURE   OF   INLAND  WATER  TRANSPORTATION      381 

enormous  and  rapidly  increasing-  traffic  on  the  lakes,  and 
the  inHnence  of  the  clieaj)  transportation  provided  bv  them 
upon  the  industries  and  domestic  and  foreign  trade  of  the 
United  States,  justifies  the  United  States  Government  in 
making  such  expenditures  as  may  be  required  from  time 
to  time  to  ke^p  the  harbors  and  channels  of  the  Great 
Lakes  abreast  of  commercial  requirements. 

In  the  case  of  certain  rivers  the  policy  that  ought  to 
be  pursued  is  quite  as  clear  as  in  the  case  of  the  Great 
Lakes.  The  traffic  on  the  Ohio  River  and  the  relation 
of  that  stream  to  the  economic  interests  of  the  great  in- 
dustrial section  drained  by  that  river  fully  Avarrant  the 
earliest  practicable  completion  of  the  project  now  in  ])rog- 
ress  of  execution,  by  which  that  stream  is  to  have  slack- 
water  navigation,  with  a  channel  nine  feet  in  depth  during 
low  stages  of  water.  The  improvement  of  the  ^Mississippi 
River  presents  an  engineering  problem  of  great  difficulty. 
If,  as  is  probable,  the  engineering  obstacles  can  be  over- 
come, the  people  of  the  United  States  will  decide  in  favor 
of  so  improving  the  Mississippi  River  as  to  make  it  an 
efficient  w^ater  route  available  for  traffic  throughout  the 
year,  except  during  the  season  of  the  year  when  the  ice 
may  require  the  suspension  of  traffic.  The  use  made  of 
the  Mississippi  River  at  the  present  time  is  not  an  ade- 
quate measure  of  the  future  usefulness  of  that  stream. 
The  rapid  development  of  the  great  ^Mississippi  ^'allcy, 
the  increasing  volume  of  our  foreign  trade,  and  the  com- 
pletion of  the  Panama  Canal,  will  so  cnhirge  the  trans- 
jKjrtation  requirements  of  the  Mississippi  Valley  as  to 
give  the  Mississippi  River  a  far  greater  opportunity  than 
it  now  has  to  be  of  service  to  the  central  section  of  our 
country. 

The  improvement  of  such  rivers  as  the  Hudson,  the 
Columbia,  the  Illinois,  and  those  of  the  State  of  Alabama, 
wall  undoubtedly  be  justified  by  the  future  growth  of  the 


382     OCEAN    AND   INLAND  WATER  TRANSPORTATION 

jjopiiliilion  and  industries  of  the  territories  tributary  to 
tliose  rivers.  The  Hudson  River  is  one  section  of  the 
water  course  between  the  Great  Lakes  and  the  sea.  The 
1  Hindis  River  foi-nis  the  natni'al  water  roiite  between  the 
(Jfcat  Lakes  and  the  iM ississippi.  The  rivers  of  Ahd)ania 
I'liake  jMtssible  the  establishinciit  of  water  routes  connect- 
ini;'  llic  ricii  coal  and  ir<»n  deposits  of  Ahd)ania  willi  tide- 
water at  JMobile.  Tlu^  Cohnnbia  River  and  its  tributaries 
make  possilde  chea|)  water  transportation  for  the  north- 
western section  of  the  United  States,  a  region  of  great 
size,  comprising  natural  resources  of  enormous  value. 
There  can  hardly  be  any  doubt  as  to  the  wisdom  of  im- 
proving these  and  our  other  more  im])ortant  waterways, 
for  the  purpose  of  keeping  the  transportation  facilities 
of  our  country  abreast  with  our  social  and  industrial 
requirements. 

In  discussing  the  place  which  canals  may  be  expected 
to  occupy  in  the  American  transportation  system  in  the 
future  it  is  well  to  bear  in  mind  that  there  are  three  dis- 
tinct kinds  of  canals.  There  are  those  with  capacity  and 
efjurpnient  for  floating  the  ships  that  ply  the  ocean  and 
such  large  intefioFTakes  as  make  up  the  chain  along  our 
northern  boundary ;  then,  there  are  canals  whose  construc- 
tion,  breiidtli  of  way,  and  locks  make  them  navigable  by 
the  large ^teamers  of  shallow  draft  that  run  on  the  main 
rivers;  finally,  there  is  the  barge  canal,  the  waterway 
which  the  word  "  canal  "  first  calls  up  in  the  minds  of 
most  persons.  This  third  kind  requires  a  depth  equal  to 
or  greater  than  is  necessary  for  river  boats,  but  its  other 
dimensions  may  be  smaller.  The  traction  of  canal  barges 
has  been,  and  is  even  to-day,  generally  horse  power;  that, 
however,  was  not  a  necessary  condition  of  barge  canal 
traffic ;  in  the  future,  steam,  or  perhaps  electricity,  will, 
in  the  case  of  the  waterways  as  elsewhere,  be  the  prevail- 
ing motive  power.     It  is  obvious  that  these  three  kinds 


FUTURE  OF  INLAND  WATER  TRANSPORTATION     383 

of  canals  fullill  difPerciit  services  to  commerce,  and  do 
not  each  .stand  in  the  same  relation  to  other  means  of 
transportation. 

The  small  barge  canal  of  former  days  is  no  longer  of 
commercial  valne;  the  railroad  has  already  become  a  nmcli 
more  efficient  freight  carrier  than  such  canals  are.  it  is 
accordingly  certain  that  the  small  Itarge  canals,  sucli  as 
the  Erie  Canal  now  is,  will  not  be  constrncted  in  the 
fntnre.  The  artificial  waterways  of  the  fntnre,  in  order 
to  be  nseful,  must  be  bnilt  either  so  as  to  accommodate 
the  vessels  navigating  the  natural  waterways  connected 
by  the  canals,  or  so  as  to  permit  the  nse  of  steam  or  elec- 
trically driven  barges  with  carrying  capacity  of  fi-om  ;")()() 
to  l,r)()()  tons. 

In  18!>P>,  Mr.  Ewald  Bellingrath,  a  transportalion  au- 
thority of  high  standing,  speaking  with  reference  to  the 
relation  of  canals  to  railroads  in  Germany,  and  of  the 
kind  of  canal  that  would  be  able  to  compete  snccessfnll_y 
with  the  railroads  and  be  of  real  service  to  commerce,  said: 
"  The  power  of  the  canal  to  compete  with  the  railroad  in 
regions  where  the  difficulties  are  rtot  too  great  is  beyond 
doubt,  if  (1)  a  sufficient  quantity  of  freight  exists  or  can 
be  secured  for  transportation;  (2)  the  canal  be  con- 
structed with  not  too  small  projjortions,  for  boats  or  barges 
not  under  500  tons;  (3)  there  be  a  good  service  to  supjily 
steam  traction."  Since  1S93  commercial  cimditions  imve 
so  changed  as  to  make  desirable  larger  dimensions  than 
Ml".  Bellingi-nth  names  in  the  foregoing  statement  of  con- 
ditions requisite  to  successful  canal  ti'ansportation.  ( 'amds 
connecting  im]n-ov(Ml  waterways  should  iu  the  future,  in 
most  cases,  be  constructed  with  a  dtplli  <>{'  al  least  1 1'  Icct, 
so  as  to  accomiuodate  barges  of  1,(I0(I  or  luore  tons  hurdcu. 

There  iwe  relatively  few  locations  in  the  United  Slates 
where  canals  of  Ihe  foregoing  diuicusions  can  be  con- 
structed.    Waterwavs  conned  ini:'  tlic  (Ii'cat  Lakes  with  the 


384  .  OCEAN   AND   INLAND  WATER  TRANSPORTATION 

ocean,  witli  llic  Ohio  Iii\cr  at  I'ittsl>iii-i:-,  and  with  the 
Mississippi  lliver  should  be  constructed  witli  reference  to 
carrying  barges  of  at  least  1,000  tons  burden.  Probably 
the  waterways  connecting  the  Alabama  coal  and  iron  fields 
and  the  manufactures  f)f  the  Birmingham  district  with 
Mobile  should  also  be  made  so  as  to  accommodate  1,000- 
ton  barges. 

The  United  States  will  doubtless  construct  a  few 
canals  to  shorten  the  main  ocean  routes  followed  by  our 
large  and  growing  coastwise  commerce.  Unquestionably 
the  short  canal  connecting  the  Chesapeake  and  Delaware 
bays  ought  to  be  much  enlarged,  so  as  to  accommodate 
ocean  shipping;  and  there  is  little  doubt  as  to  the  desirabil- 
ity of  a  canal  to  save  passing  around  Cape  Cod  peninsula. 
There  has  been  much  said  in  favor  of  an  ocean  ship  canal 
across  New  Jersey,  from  deep  water  on  the  Delaware  to 
the  ocean  near  New  York  City,  and  another  across  the 
northern  part  of  the  peninsula  of  Florida.  It  is  ques- 
tionable, however,  whether  either  one  of  these  waterways 
would  be  used  extensively  by  ocean  vessels  in  preference 
to  the  somewhat  longer  open-sea  route.  Both  of  these 
canals  would  be  of  value  to  our  navy,  and  for  naval  rea- 
sons their  construction  might  possibly  be  justifiable, 
although  they  are  not  an  unquestionable  necessity  to 
commerce. 

The  services  that  inland  waterways  are  to  perform  in 
the  future  will  differ  from  those  they  have  rendered  in 
the  past.  Both  the  railroads  and  the  waterways  of  the 
future  are  destined  to  be  more  efficient  transportation 
agents  than  they  have  been  in  the  past.  Although  the 
railroad  has  reached  a  high  state  of  efficiency  and  has 
by  no  means  reached  the  end  of  its  technical  development, 
the  usefulness  of  inland  waterways  as  a  part  of  the  gen- 
eral transportation  system  of  the  country  will  not  cease 
to  be  important.     Indeed,  the  value  of  inland  waterways 


FUTURE   OF   INLAND   WATER  TRANSPORTATION      385 

will  tend  to  increase  with  the  advance  of  our  country  in 
population  and  in  industry.  The  development  of  facili- 
ties for  public  carriage  has  become  increasingly  important, 
and  our  industries  will  require  both  rail  and  water  car- 
riers for  the  adec^uate  jierformance  of  the  ever-enlarging 
work  of  transportation. 


INDEX 


Adriatic,  the,  32. 

Agreements  among  ocean  carriers, 
142;  provisions  of,  147;  for  divi- 
sion of  traffic,  153;  difficulty  of, 
155;  instability  of,  157. 

Aid,  government,  to  ocean  trans- 
portation, see  Government  aid. 

American     Mediterranean    trunk 

-     route,  48. 

Amsterdam  Canal,  date  of  open- 
ing, description,  traffic,  etc.,  of, 
55. 

Archimedes,  the,  28. 

Articles  and  register,  81. 

Association  of  Lake  Lines,  357. 

Baltic  Canal,  description,  dimen- 
sions, traffic,  etc.,  of,  54. 

Baltimore  clipper,  20. 

Bark,  description  of,  15. 

Barkentine,  description  of,  15. 

Bill  of  health,  79. 

Bill  of  lading,  ocean  freight,  73; 
international  express,  110. 

Bills  of  exchange,  83. 

Black  Bull  Line,  when  started, 
19. 

Bounties,  French,  277,  289;  gov- 
ermnei\t,  objections  to,  278; 
liritish,  292;  German,  296;  Jap- 
anese, 298;  general  argument 
for  and  against,  301;  argument 
of  experience  against,  304. 

Brandon,  the,  34. 


Brig,  description  of,  15. 

Brigantine,  description  of,  15. 

British  India  Company,  the,  132. 

Bureau  of  F^isheries,  Inmiigra- 
tion.  Manufactures,  Navigation, 
Standards,  Statistics,  The  Cen- 
sus, 217-224. 

Canadian,  the,  33. 

Canadian  Pacific  Railway  Steam- 
ship Company,  161. 

Canal,  Suez,  tolls  on,  10;  Panama, 
chief  reason  for  construction  of, 
48;  Corinth,  beginning,  cost,  and 
dimensions  of,*  53;  Baltic,  con- 
struction, traffic,  receipts,  etc., 
of,  54;  .\mstcrdam,  particulars 
of,  55;  Manchester,  cost,  dimen- 
sions, etc.,  of,  56;  inlantl,  typos 
of,  325.  332;  abandonmetit  of, 
332,  333;  ICric,  334. 

Canals,  construction  of,  in  United 
States,  336,  338;  from  coal  fields 
to  seaboard,  339;  Pemisylvania, 
340;  Maryland  and  Virginia,  340; 
causes  of  failure  in  l)uiidiiig  of, 
341;  Illinois,  360;  gencnd  cla.^.sos 
of,  .382;  l)argo,  .383;  new  dimen- 
sions of,  .383;  ocean-ship.  .384. 

Canal  transportation  .service,  or- 
ganization of,  34(5. 

Capital,  for  investment  in  Ameri- 
can shipping,   5;    abundant    in 
the  United  States,  315. 
387 


388 


INDEX 


Cargo,  ton,  9;  two  classes  of,  11; 
tonnage,  government's  use  of 
statistics  of,  11;  ratio  of,  to  net 
register,  11;  how  shipped,  11; 
apparatus  and  methods  for 
handhng  of,  61,  84-S6;  transfer 
of,  83;  on  Great  Lakes,  365. 

Carmania,  the,  38. 

Chamber  of  Shipping  of  the  United 
Kingdom,  147. 

Channels,  depth  of,  61. 

Chart  of  ocean  routes,  50. 

Chartered  vessel,  174. 

City  of  New  York,  the,  28. 

Civil  War,  effect  of,  on  merchant 
marine,  282,  284. 

Clearance  paper,  79. 

Clermont,  the,  26. 

Clipper  ships,  20;  demand  for, 
21. 

Coal  traffic  on  the  Ohio  River, 
348,  362. 

Coast  and  Geodetic  Survey,  215. 

Coastwise  traffic,  of  Pacific  States, 
163;  Atlantic  and  Gulf  States, 
166;  Great  Lakes,  167;  open 
only  to  American  vessels,  258. 

Collins  Line,  the,  28. 

Columbia  River,  navigation  and 
improvement  of,  329. 

Compagnie  Generale  Transatlan- 
tique,  French  Government  con- 
tract with,  291. 

Competition,  in  ocean  transporta- 
tion service,  134;  restraint  of, 
138;  in  charter  and  line  traffic, 
138,  174;  among  great  ocean 
lines,  139;  reward  of  successful, 
139;  cooperation  for  the  regu- 
lation of,  140;  beneficial  nature 
of,  140;  foreign,  aided  by  gov- 
ernments, 285;  on  Great  Lakes, 


356,  357;  between  waterways 
and  railroads,  374. 

Compound  engine,  34. 

Conference  of  ocer-n  lines,  143; 
agreements  of,  144;  forms  of 
organization  of,  145-147;  regu- 
lation of  rates  by,  180. 

Consular  service,  the,  221. 

Cooperation,  to  restrain  competi- 
tion, 142;  advantages  of,  143, 
168;  between  ocean  and  rail 
carriers,  159;  on  the  Pacific, 
161;  on  the  Atlantic  and  Gulf 
coasts,  164;  in  Great  Britain, 
pohcy  of,  167;  between  rail- 
roads and  inland  waterways, 
378. 

Corinth  Canal,  description  of,  53. 

Corps  of  Engineers,  United  States 
Army,  214. 

Cunard  Company,  the,  organiza- 
tion of,  27;  two  largest  vessels 
of,  43;  vessels  of,  in  1901,  132; 
subventions  to,  293,  295. 

Dakota,  the,  42. 

Danube  measurement  of  net  ton- 
nage, 10. 

Decline  of  American  vessel  ton- 
nage, 279;  reasons  for,  285. 

De  Laval  steam  turbine,  38. 

Direct  acting  engine,  32. 

Dirigo,  the,  259. 

Displacement  tonnage,  9. 

Enrolled  vessels,  12;  use  of  term, 

12. 
Equipment,     transportation,     on 

Erie  Canal,  346;  on  Ohio  and 

Mississippi  rivers,  346;  on  the 

Great  Lakes,  352. 


INDEX 


389 


Erie  Canal,  dimensions,  cost,  etc., 

of,  334,  3-16;  equipment  on,  346; 

decline  in  tonnage  of,  360. 
Erie  and  Western  Transportation 

Company,  354. 
Express  service,  see  International 

express  .service. 

Fall  Line,  the,  of  Atlantic  rivers, 
327. 

Fares,  ocean,  169;  competitive, 
170;  cabin  and  steerage,  171. 

Foreign  trade,  XTnited  States, 
value  of,  in  1905,  68;  tonnage 
of  vessels  required  for,  69. 

Freight,  forwarders  of,  72;  busi- 
ness papers  of,  73;  classification 
of,  to  United  States,  148;  to 
South  Africa,  149;  to  Dutch 
East  Indies,  149;  by  Royal  Mail 
Steam  Packet  Co.,  149;  less  de- 
tailed than  railroad  freight  clas- 
sification, 149;  comparison  of 
volume  of  railroad  and  ocean, 
149;  two  kinds  of,  173;  solicita- 
tion for,  180;  service,  improve- 
ments in,  188;  handling  of,  on 
inland  rivers,  347;  character  of, 
on  Great  Lakes,  366;  package, 
on  Great  Lakes,  368. 

Future  of  American  marine,  311; 
of  inland  water  transportation, 
380. 

Geared  engine,  32. 

Government  aid,  to  ocean  tran.s- 
portation,  by  the  United  States, 
211,  212,  305,  308;  departments 
and  bureaus  concerned  with, 
213-232;  appropriations  by  Con- 
gress for,  236;  by  France,  288; 


by  England,  292;  by  Germany, 
296;  by  Japan,  298;  di.scrimina- 
tion  in,  303. 

Government  regulation,  of  rail- 
roads, 5;  of  ocean  carriers,  209; 
functions  of,  210;  of  terminal 
facilities,  242;  tendency  of,  in 
United  States,  243. 

Great  Britain,  the,  28,  40. 

Great  Kaslern,  the,  29,  30. 

Great  Lakes,  324;  size  of,  330;  di- 
mensions of  vessels  on,  351; 
traffic  on,  353,  365,  366;  lines 
on,  controlled  by  railroads, 
353;  competition  on,  356,  357; 
vessel  tonnage  on,  365;  cargo 
tonnage  on,  365;  .sail  and  steam 
tonnage  on,  366;  commerce  on, 
character  of,  366. 

Great  Northern  Steamship  Com- 
pany, 161. 

Great  Western,  the,  27. 

Gross  register,  9;  tonnage  of,  how 
obtained,  9;  Moorsom's  method 
of  determining,  9;  meaning  of, 
in  all  countries,  10;  variations 
of,  10. 

Hamburg  -  American  Line,  com- 
mencement of,  131;  statistics 
and  services  of,  131. 

Harbor  construction  and  admini.s- 
tration,  American  system  of,  59; 
in  New  Orleans,  59;  State  sys- 
tem of,  60;  in  New  York  City, 
60;  in  Philadelphia,  60;  in  Cali- 
fornia, 60. 

Health  and  quarantine  regula- 
tions, enforcement  of,  240;  tj^J- 
ical  illustration  of,  241. 

Hennepin  Canal,  332. 

Holland,  the,  34. 


300 


INDEX 


Hudson  River,  the,  32G;  traffic  on, 

361. 
Hull,  the,  40;   divided  into  bullc- 

heads,  42. 
Hydrographic  Office,  230. 

IHinois  and  Michigan  Canal,  360. 

Immigrant  traffic,  88,  90;  not 
easily  controlled,  155;  fund,  242. 

Immigration,  Bureau  of,  220. 

Improvement  of  inland  water- 
ways, 338,  342;  how  conducted, 
343. 

Inland  water  transportation,  in 
United  States,  undeveloped, 
371;  improvements  of,  in  Eu- 
rope, 372;  future  of,  380. 

Inland  waterways,  classes  of,  in 
United  States,  325;  improve- 
ment of,  338",  342,  381;  equip- 
ment employed  on,  345;  traffic 
on,  359;  comparison  of,  with 
railroads,  370;  relations  as  car- 
riers, 374;  influence  of,  376; 
creators  of  traffic,  377;  comple- 
ments of  railroads,  377;  value 
of,  384. 

Inman  Line,  the,  28. 

Internal  trade  of  the  United 
States,  323. 

International  Conference  of  Ship- 
owners in  the  Baltic  and  White 
Sea  Trades,   146. 

International  express  service,  107; 
by  whom  conducted,  107;  larg- 
est company  in,  108;  organiza- 
tion of,  108;  business  papers, 
109,  110;  arrangements  of,  with 
steamship  company,  110,  111; 
competition  of,  with  parcels 
post,  111;  competition  for,  not 
keen,  112. 


International  Mercantile  Marine 
Company,  founding  of,  132. 

International  Navigation  Com- 
pany, 165. 

Interstate  commerce,  powers  of 
Congress  over,  234. 

Introduction  to  Ocean  Trans- 
portation, 3. 

Invoice  for  foreign  shipment,  75. 

Ketch,  description  and  merits  of, 
16. 

Knapp,  Martin  A.,  on  competi- 
tion, 140. 

Lake  Carriers'  Association,  357. 

Lake  lines  controlled  by  railroads, 
353,  356. 

Lake  transportation  serx'ice,  or- 
ganization of,  354;  development 
of,  357. 

Legislation,  maritime,  aid  to,  6. 

Life  Saving  Service,  the,  226. 

Lighthou.se  Board,  the,  215. 

Listing  of  American  vessels,  11. 

Liverpool,  the,  27. 

Lloyd's  Association,  history  of, 
191;  business  methods  of,  191; 
pubhcations  of,  192. 

Lugger,  the,  15. 

Manchester  Canal,  description, 
statistics,  etc.,  of,  55. 

Manifest,  specifications  of,  77. 

Marine  boilei^s,  36. 

Marine  engines,  varieties  of,  31- 
34;  power  obtained  by,  from 
1840  to  1898,  table  showing,  37; 
turbine,  38. 

Marine  insurance,  189;  origin  of, 
190;  control  of,  by  English  un- 
derwriters,   193;   history  of,  in 


INDEX 


391 


the  United  States,  193;  decline 
of,  in  the  United   .States,  195 
American  firms  engaged  in,  196 
bj^   steamship  companies,    197 
policy    defined,   198;    essentials 
of,    199;    types   of,   199;    losses 
covered   by,  201;   Lloyd's  form 
of,  201,  205;    protection  of  in- 
sured by,  202;  general  and  par- 
ticular average,  20.3. 

Maritime  interests  in  the  l-nited 
States,  outlook  for,  31 1;  depend- 
ent upon  four  conditions,  311. 

Maritime  legislation,  aid  to,  0. 

Measurement  of  ships,  terms  used 
in,  9;  by  United  States  Govern- 
ment, 11. 

Merchant  Marine  Commission, 
recommendations  of,  for  boun- 
ties, 302,  304;  naval  reserve  bill, 
308. 

Merchant  marine  question,  as  a 
political  problem,  6;  solution  of, 
6,301. 

Minnesota,  the,  42. 

Mi-ssissippi  River,  328;  traffic  on, 
348,  362,  371;  equipment  on, 
364;  improvements  of,  381. 

Monitor,  the,  28. 

Monopoly,  extent  of,  in  railway 
service,  134;  characteristics  of, 
134,  135. 

Morgan  Line,  the,  166. 

Na>tural    bay   ports,    illustrations 

of,  57. 
Net  register,  9;  how  obtained,  9; 

figures    for    variations    of,    10; 

Danulie    measurement    of,    10; 

British  practice  of.  followed,  10; 

ratio  of,   to    gross   and   cargo, 

11. 


Nippon  Yusen  Kaisha  (Japanese 
Steamboat  Company),  161,  299. 

North  Atlantic  Steam  Traffic  Con- 
ference, 145. 

North  German  J..l()yd  Line,  1)C- 
ginning  and  statistics  of,  1.32; 
subventions  to,  296. 

Northern  Pacific  Steamshi]»  Com- 
pany, 162. 

Notting  Hill,  the,  29. 

Occidental  -  Oriental  Stcam.vhip 
Company,  i()2. 

Ocean  bill  of  lading,  73. 

Ocean  mail  .service,  performance 
of,  68;  weight  of,  in  1905,  99; 
cost  of,  99;  postage  of,  exceeds 
expense  of,  100;  payment  for, 
by  United  States  Government, 
100;  contract  service  of  pay- 
ments for,  100;  largest  contracts 
for,  101;  payments  for,  without 
special  contract,  102;  other  ex- 
penses for,  by  the  United  States, 
102;  at  sea,  103;  influence  of,  on 
ocean  transportation,  105;  re- 
quirements of  ve.s.sels  engaged 
in,  106;  higher  cost  of,  in  Ameri- 
can ships,  170;  payments  for, 
how  determined,  170;  restricted 
to  American  vessels,  262. 

(Jcean  passenger  service,  87;  cau.se 
of  increa.se  in,  88;  statistics  of, 
in  1904-1905,  88;  steerage,  90; 
enlarged  i)y  tourist  agencies,  90; 
separate  arrangements  for  haiid- 
hng  of,  91;  development  of,  92; 
cla.s.ses  in,  92;  improvements  of 
second  and  third  classes  in,95- 
96;  result  of  competition  for.  98. 

Ocean  routes,  two  parts  of.  44;  de- 
termination of,  44;  influences  af- 


392 


INDEX 


fecting,  45;  trunk  line,  46;  tri- 
angular, 48;  chart  of,  50. 

Ocean  terminals,  parts  of,  50. 

Ocean  transportation,  economics 
of,  3,  126;  relations  of  govern- 
Uients  to,  6;  governed  differ- 
ently from  railway  service,  44; 
business  of,  67;  organization  and 
evolution  of,  70,  126,  130;  serv- 
ice performed  by,  125;  early 
manner  of,  128;  first  vessels  en- 
gaged in,  128,  129;  results  of 
economical  organization  of,  131; 
competition  in,  133,  134;  rea- 
sons for  competition  in,  135, 
136;  service,  different  from 
railways,  137;  agreements,  142; 
conferences  in,  143;  service  on 
the  Pacific,  161;  policy  of  United 
States  toward,  260. 

Ocean  trunk  line,  46;  North  At- 
lantic, 46;  South  African,  47; 
South  American,  47;  Ameri- 
can Mediterranean,  48;  Pacific, 
49. 

Oceanic  Steamship  Line,  163. 

Ohio  River,  329;  coal  traffic  on, 
348,  362. 

OJd  Colony  Steamboat  Company, 
166. 

Oregon  Navigation  Company, 
162. 

Organization  of  transportation 
service,  on  the  ocean,  70;  on  the 
Great  Lakes,  354. 

Oscillating  engine,  the,  32. 

Pacific  Mail  Steamship  Company, 

162,  163. 
Pacific  Ocean  trunk  lines,  49. 
Packet  ships,  why  so  called,  19; 

discontinuance  of,  129. 


Paddle  wheels  on  ocean  vessels, 
early  use  of,  26;  abandonment 
of,  29. 

Panama  Canal,  reasons  for  con- 
struction of,  48;  effects  of,  on 
ocean  routes,  50;  table  of  dis- 
tances via,  and  existing  routes, 
51;  saving  of  distances  via,  53. 

Parcels  post,  international  agree- 
ments for,  103;  countries  in- 
cluded in  agreements  for,  103; 
statistics  of,  in  1905,  103;  de- 
velopment of,  104;  agreements 
with  British  Government  for, 
108;  arguments  in  favor  of,  112. 

Parsons'  steam  turbine,  38. 

Peninsular  and  Oriental  Company, 
132. 

Persia,  the,  29. 

Pilots,  control  over,  by  Federal 
Government,  237;  by  the  States, 
238. 

Pooling,  of  profits,  153;  between 
lines,  154. 

Portland  and  Asiatic  Steamship 
Company,  162. 

Ports,  types  of,  56;  improvement 
and  administration  of,  58;  pub- 
lic administration  of,  58;  pri- 
vate, illustration  of,  59;  public, 
in  Europe,  prevalence  of,  59; 
police  supervision  of,  in  New 
York  City,  244. 

Public  Health  and  Marine  Hospi- 
tal Service,  227, 

Quadruple  expansion  engine,  34. 
Quarantine,  stations  and  officers, 
227;  regulations  of,  240. 

Railroads,  government  regulation 
of,  5. 


INDEX 


393 


Railway  transportation,  more  in- 
terest in,  than  in  ocean  trans- 
portation, 4. 

Rainbow,  the,  40. 

Rates,  agreements  on,  by  Confer- 
ences, 148;  based  upon  rough 
classification,  148;  ocean,  169; 
competition  in,  172;  charter, 
173;  bargaining  methods  for, 
179;  varied  with  classification, 
180;  berth,  181;  time  contract, 
181;  on  interior  shipments,  183; 
fluctuations  in,  184;  on  grain, 
flour,  etc.,  New  York  to  Liv- 
erpool, 1884-1903,  187;  Ger- 
many's policy  of,  297;  influence 
of  inland  water  transportation 
on,  375. 

Ratio  of  net  to  gross  and  cargo 
register,  11. 

Rebates,  144;  granting  of,  by  Con- 
ferences, 151. 

Receipt  for  ocean  shipment,  73. 

Register,  gross  and  net,  9. 

Registered  tonnage,  u.se  of  the 
term,  12. 

Revenue  Cutter  Service,  225. 

River  and  Harbor  Bill,  342. 

Rivers,  three  natural  groups  of, 
325;  principal,  in  New  Eng- 
land, 326;  of  North  Atlantic 
seaboard,  327;  of  South  Atlan- 
tic, 327;  of  central  United 
States,  328;  of  Pacific  coast, 
329;  steamboat  lines  on,  in  the 
United  States,  347. 

River  ports,  illustrations  of,  57. 

Roadstead  port,  example  of,  56. 

Royal  William,  No.  2,  the,  27. 

Sailing  Shipowners  International 
Union,  the,  146. 


Sailing  vessel,  how  classified,  14; 
main  features  of  history  of,  18; 
narrowing  role  of,  22;  services 
required  by,  25. 

Sails,  designation  of,  18. 

Sault  Ste.  Marie,  cargo  passing, 
366. 

Savannah,  the,  26. 

Schooner,  description  of,  15,  17; 
first,  built,  16;  the  largest  afloat, 
21. 

Scotia,  the,  32. 

Screw  propeller,  substitution  of, 
28;  first  large  ves.sel  to  use,  28; 
introduction  of,  29. 

Sea,  the,  an  open  highway,  44. 

Sea  post  office,  103. 

Seamen,  protection  of,  by  United 
States,  262;  wages  of,  263; 
higher  wages  of,  should  be  con- 
tinued, 264. 

Ship,  description  of,  13;  size,  and 
character  of,  14;  ".fuU-riggedi" 
14;  caravel  type  of  constructiou 
of,  18;  .size  in  1825,  19;  packet, 
19;  increase  in  size  of,  19;  clip- 
per, 20;  ships,  iron,  construc- 
tion of,  41;  steel,  introductioa 
of,  41;  higher^ost^fjopei^ting 
in  America,  317. 

Shipbuilding,  fostering  of,  by 
United  States  Government, 
257;  foreign  competiti(5n  in, 
260;  development  of,  266.  275; 
activity  in,  206;  Civil  War 
period  of,  267;  le.s.s  costly  in 
foreign  yards,  268;  higher  costs 
in  United  States,  causes  of, 
269;  labor  costs  of,  272.  316; 
in  Europe,  large  .scale  of.  274; 
industry,  strengthening  of,  in 
the    United    States,    276,   278; 


394 


INDEX 


bounties  in  foreign  countries, 
277;  conditions  affecting,  314. 

Shipping,  American,  favorable 
conditions  for,  5;  figures  of,  for 
1769,    18;     burdened    by   Con- 

.    gress,  283. 

Side-lever  engine,  31. 

Sirius,  the,  27. 

Sloop,  how  distinguished,  15. 

Steamboat  Inspection  Service, 
218. 

Steamers,  in  foreign  and  domestic 
trade,  percentage  of,  22;  per- 
centage of  world's  commerce 
now  handled  by,  23;  efficiency 
of,  24;  economy  in  motive 
power  of,  24. 

Steamship,  main  phases  in  devel- 
opment of,  26;  first,  on  the  Hud- 
son, 26;  first  to  cross  the  ocean, 
26;  effect  of,  on  ocean  transpor- 
tation, 129. 

St.  Louis,  and  St.  Paul,  the,  34. 

Subsidies,  ocean  mail,  281;  by 
France,  289;  by  Great  Britain, 
294,  307;  by  Germany,  296;  by 
Japan,  298. 

Suez  Canal,  tolls,  how  levied,  10; 
charge  for  tolls  on,  51;  net  reg- 
ister tonnage  passing  through 
in  1904,  51;  beginning,  cost, 
etc.,  of,  52;  table  of  distances 
via,  52. 

Tables  of  distances  via  Panama 
and  Suez  canals  and  via  ex- 
isting routes,  51,  .52. 

Terminals,  ownership  of,  137; 
charges  at,  246;  tables  of 
charges  at,  247-251. 

Ton,  explanation  of,  9;  two  kinds 
of,9;  gross, 9;  cargo,  11;  weight. 


11;  metric,  11;  measurement, 
explanation  of,  11. 

Tonnage,  explanation  of,  9;  dis- 
placement, gro.ss  and  net  reg- 
ister of,  9;  gross  register  of,  how 
obtained,  9;  Moorsoom's  meth- 
od of,  9;  gro.ss  register,  varia- 
tions of,  10;  registered,  12;  en- 
rolled, 12;  .sail,  in  foreign  trade, 
1900-1904,  decline  of,  22;  in  do- 
mestic fleet,  23;  steam,  figures 
for  domestic  fleet,  1880,  1895, 
and  1904,  23;  taxes  on,  by  the 
United  States  Government,  252; 
taxes  on,  by  the  States,  254-256; 
taxes  on,  coastwise  ves.sels  ex- 
empt from,  261;  taxes  on,  lev- 
ied on  foreign  vessels,  261;  de- 
cline of,  under  American  flag, 
279;  total  of,  in  Fnited  States, 
279;  on  the  Great  Lakes,  .350, 
365. 

Toyo  Ki.sen  Kai.sha  (Oriental 
Steamship  Co.),  149,  162,  299. 

Traffic,  on  American  railroads  and 
waterways,  11;  ocean  passen- 
ger, handling  of,  67;  freight, 
movement  of, 67;  freight,  chang- 
ing character  of.  69;  line,  71; 
agencies  required  for,  71;  busi- 
ness papers,  74,  77;  division  of, 
by  Conferences,  152;  on  inland 
waterways,  359;  on  Ohio  canals, 
360;  comparison  of,  tetween 
railroads  and  inland  waterways, 
370;  conditions  necessarj^  for 
improvement  of,  .371. 

Tramp  steamer,  .service  performed 
by,  70. 

Transportation,  problem  of,  5. 

Triple-expansion  engine,  34. 

Trunk  engine,  33. 


INDEX 


395 


Trunk  line,  North  Atlantic,  4(3; 
South  African,  47;  South  Amer- 
ican, 47;  American  Mediterra- 
nean, 48;  Pacific,  49. 

Turbine  engine,  38;  two  types  of, 
38;  advantages  of,  40. 

United  States,  reasons  for  becom- 
ing a  great  maritime  nation, 
5;  naval  policy  of,  260;  interna- 
tional political  ideals  of,  318. 

Universal  Postal  Congress,  105. 

Universal  Postal  Union,  104. 


Vessels,  tonnage  of,  9;  measure- 
ment of,  the  Danube  system, 
10;  listing  of,  11;  registered,  en- 
rolled, and  licensed,  12;  types 
of,  13;  sailing,  how  classified, 
14;  square-rigged,  14;  fore-and- 
aft  rig,  14;  full-rigged,  14;  on 
Great  Lakes,  size  of,  351. 

Vessel  ton,  9. 


Weather  Bureau  Service,  United 
States,  the,  228. 


(3) 


37 


■I^ 


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